Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Education (Schools) Bill

Mr. Murphy: To ask the Secretary of State for Wales what consultations he has had with local education authorities in Wales regarding the provisions affecting Wales in the Education (Schools) Bill.

Mr. Rowlands: To ask the Secretary of State for Wales whether he will make a statement on the future of Her Majesty's inspectorate of schools in Wales.

The Minister of State, Welsh Office (Sir Wyn Roberts): The provisions in the Education (Schools) Bill relating to the inspection of schools and information on their performance were trailed in the citizens charter and the charter for parents in Wales, copies of which were sent to all local authorities in Wales as well as to a wide range of bodies representative of education interests. My officials have met representatives of the local education authorities to discuss various aspects of the new proposals and there has also been correspondence with the Department.
An announcement on the future role and organisation of Her Majesty's inspectorate of schools in Wales will be made shortly.

Mr. Murphy: Does the Minister accept that education in Wales owes much to the professionalism and the independence of the Welsh schools inspectorate, and that there is widespread hostility among both teachers and parents in Wales to the possible privatisation of that service? Most importantly, why is the latest report on schools inspectors in Wales gathering dust on the Minister's desk? The House has a right to know why he is suppressing that report.

Sir Wyn Roberts: Of course the inspectorate is highly respected in Wales, but the hon. Gentleman will know that it was never geared to carry out inspections with the frequency that we expect will result from the provisions of the Education (Schools) Bill and that we envisage in the parents charter. What Labour Members say makes it sound as though they do not want parents to know what the schools that their children are attending are like.
With regard to privatisation, the hon. Gentleman must realise that if inspections are to be carried out with the kind of frequency that we have in mind, there has to be a considerable change in the inspection procedure. The consultants' report is part of our wider consideration of the future role of the inspectorate. It is an internal review, and we do not intend to publish it.

Mr. Rowlands: That is a disgraceful statement. Was not the citizens charter supposed to be all about open Government? The Minister has now said that he will not even publish the report. Is that because the report does not substantiate the proposals in the Education (Schools) Bill, which is nothing more than English ideology that the Government are transmitting to Wales? Why is the Minister slavishly following the English example when the Secretary of State for Scotland is not doing so? His right hon. Friend is sustaining and expanding the Scottish inspectorate, so why is the Minister emaciating ours?

Sir Wyn Roberts: The hon. Gentleman is talking a lot of nonsense. His concentration on the consultants' review is ridiculous. Labour Members should consider what is said in the parents charter about inspection of schools in Wales. It is as a result of that charter that we have to take steps to change the inspectorate.

Mr. Gwilym Jones: How often are schools in Wales inspected by HMI and what change in that frequency is my right hon. Friend seeking to achieve?

Sir Wyn Roberts: I cannot give my hon. Friend a precise answer to that question, but the inspection of a school in Wales is a fairly rare occurrence, taking schools as a whole. The 58 inspectors spend only 65 per cent. of their time inspecting and the other 35 per cent. advising. Again, I urge the House to consider the fact that we expect inspections of individual schools to take place on a four to five-yearly basis.

Labour Statistics

Mr. Ray Powell: To ask the Secretary of State for Wales if he will state the number of male and female unemployed in Wales for 1987, 1988, 1989, 1990 and to the present date.

The Secretary of State for Wales (Mr. David Hunt): In December of each of the years set out in the hon. Gentleman's question, the figures are 97,800, 79,900, 64,100, 72,900 and 95,600 respectively for male unemployed. For female unemployed the figures were 38,600 in 1987, 31,600 in 1988, 21,700 in 1989, 21,000 in 1990 and 26,000 in December 1991.

Mr. Ray Powell: Will the Secretary of State, with the Prime Minister, accept responsibility for the deplorably high level of unemployment in Wales? They both go about the Principality boasting about their actions in terms of foreign investment in Wales. They should be reminded that the major investors coming into Ogwr borough, and Bridgend in particular, were Ford of Bridgend, which was brought in under Jim Callaghan's Labour Government, and the Japanese company, Sony, which was also brought in by a Labour Government. It was the Labour party and a Labour Government who created investment into Wales before the present Prime Minister was even elected to this honourable House. If anyone should be boasting, it is those of us in the Labour party. The sooner the Secretary of State and the Prime Minister come to the Principality, the better: let the voters there decide who should have the credit for what is happening in Wales and also what should be done to the Conservative party in view of the deplorable levels of unemployment to be found in Wales.

Mr. Hunt: I am delighted that the hon. Gentleman has given me the opportunity to report to the House the latest figures for inward investment. The calendar year just finished, 1991, brought new record levels of inward investment to Wales from overseas and the rest of the United Kingdom. I am delighted to report that those new levels consist of 183 projects recorded by Welsh Development International, promising about 17,000 jobs. These are the highest figures ever.

Mr. Livsey: Will the Secretary of State note that unemployment in my constituency of Brecon and Radnor has doubled in the past 12 months? Will he refute the Prime Minister's suggestion that inward investment has come into Wales as a result of lower personal taxation? Will he agree that inward investment is due to the activities of the Welsh Development Agency, some of the lowest wages in Britain and high levels of skills, and that it is the quality of the Welsh work force as much as anything else that has brought inward investment into Wales?

Mr. Hunt: I find this very interesting. I have been concentrating on a report of the Select Committee on Welsh Affairs on Inward Investment into Wales. I thought that the hon. Gentleman was a signatory to the report. I have read carefully the reasons given for the record levels of inward investment that has come into the United Kingdom, including Wales. The Select Committee reported that overseas companies saw the attractions of the United Kingdom—a number of factors are set out—as including, in particular, a favourable tax regime. Has the hon. Gentleman decided to change his mind?

Mr. Grist: Does my right hon. Friend agree that one of the best hopes for the future of south Wales is completion of the Cardiff Bay Barrage Bill, which opposition from so many Labour Members has put in jeopardy?

Mr. Hunt: Yes. I hope that the Opposition will get their act together on the Bill and recognise that it represents enormous investment in Wales and something that will put Cardiff and Wales generally on the world map in a very big way.

Mr. Barry Jones: The Minister's answers are evasive. They do not go to the heart of the questions. I remind the Secretary of State of the haemorrhaging that has taken place, resulting in a severe loss of jobs in Wales for which he bears a heavy responsibility. I refer to just a few examples. At Ferranti in Bangor, there have been 250 job losses, which would be equal to about 2,500 jobs in eastern Wales. Nearly 500 jobs have been lost in the steel industry at Shotton in less than a year. As for apprenticeships in British Aerospace in Clwyd, more than 100 people may not be offered jobs by that great company because of the Government's failed economic policies. We have also lost jobs in the cement industry and there are question marks over the Point of Ayr colliery. Does the right hon. Gentleman realise that since the beginning of the recession unemployment in Wales has increased by more than 38,000, and that during that period he has brought forward not one new policy to help the economy? He should be ashamed.

Mr. Hunt: I am pleased to announce this afternoon that since the last Welsh Question Time, there have been 13 new industrial projects—supported by £6 million of regional selective assistance which had been announced—500 new jobs and the safeguarding of 300 others. I am pleased also to announce a total of more than £6.5 million industrial investment by a further four companies, either expanding, modernising or setting up operations in Wales. I believe that Wales continues to be less severely affected by the recession than the United Kingdom as a whole, but it cannot possibly shield itself from the recession both in the United Kingdom and in the rest of the world.
I have been following the hon. Gentleman carefully. He has been wandering about Wales, giving a spending pledge here and a spending pledge there. He has failed to recognise that the statutory minimum wage policy that he supports would lose Wales 70,000 jobs. He has also failed to recognise that the Welsh people will have to pick up the bill for his spending policies.

Children's Homes, Gwynedd

Mr. Ieuan Wyn Jones: To ask the Secretary of State for Wales what representations he has received on the conduct of children's homes in Gwynedd.

The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): Representations have been received from a former employee of Gwynedd county council and from hon. Members.

Mr. Jones: The Minister will be aware that certain allegations have been made about incidents in homes in Gwynedd, and in other parts of Wales, during recent months. He will also be aware that Gwynedd has set up an inquiry into those incidents. Is he satisfied with the conduct of that inquiry? Will he ensure that, when the inquiry is completed, its findings will be published for the benefit of all concerned in Gwynedd?
Will the hon. Gentleman investigate the levels of remuneration paid to those who work in children's homes? Should they not be paid salaries which accord with the status of the jobs that they perform?

Mr. Bennett: An inquiry has indeed been set up by Gwynedd county council, but I understand that it is currently suspended because of police investigations. Obviously, I cannot comment on the inquiry because of those investigations. I hope that Gwynedd county council will listen carefully to what the hon. Gentleman has said about publishing a report of the inquiry; I certainly expect it to publish one.
I have always made it clear that I take seriously any allegations of misbehaviour in any children's home in Wales. That is why I directed Gwent county council to carry out a statutory inquiry into the organisation of the Ty Mawr home. I understand that the report on that is to be published shortly. I have also instituted an inquiry into the running of all children's home in Wales, and I shall publish the report of that within the next few days.

Kuwait and Bahrain

Sir Anthony Meyer: To ask the Secretary of State for Wales if he will make a statement about the Minister of State's recent visit to Kuwait and Bahrain.

Sir Wyn Roberts: I led a trade mission to Kuwait from 5 to 13 November, which gave Welsh companies the opportunity to develop trade links. Twelve companies took part, several of which obtained firm orders, while other business is in the pipeline. While in Kuwait, I represented the United Kingdom at the extinguishing of the last oilwell fire. I also visited Bahrain, where 26 Welsh firms were represented by the Welsh Office and 10 other Welsh firms had exhibition stands, along with a large British contingent exhibiting at the Rebuild Kuwait '91 trade fair.

Sir Anthony Meyer: I congratulate my right hon. Friend on the evident, tremendous and burning success of his mission. Could he give us any information on what that mission might represent in terms of increased business, especially for small and medium-sized businesses in Wales?

Sir Wyn Roberts: All the companies either represented by the Welsh Office or exhibiting in the two Gulf states were small or medium sized. We secured orders worth £150,000 during the visit, and there are good prospects for further orders of about £800,000. I hope that additional trade will flow from the mission in the longer term.

Mr. Denzil Davies: The Minister used the word "extinguishing". Shall we not, before long, see the

extinguishing—after 13 years—of the three Conservative Governments who have managed to create the current situation in Wales, where gross domestic product per capita is lower than in any other region? After those three Conservative Administrations, Wales—alas—is now the poorest region in Britain.

Mr. Speaker: Order. The question is about Kuwait.

Mr. Davies: It is indeed, but it is also about trade between Kuwait and Wales.
In view of the developments that I have mentioned, why should the people of Wales vote for a fourth Conservative Government?

Sir Wyn Roberts: They will vote for a fourth Conservative Government, because since 1979 the record of the current Government and their predecessors in regard to Wales has been excellent. We have transformed the Welsh economy. We have increased the number of businesses in Wales, VAT registrations are up by 25 per cent., production industries are up by 60 per cent.—twice the United Kingdom average—and the number of self-employed people has increased by 60 per cent. as well.
The reason why we arrange trade missions such as the one that I led to Kuwait—six similar missions have been conducted—is our interest in stimulating orders for the new Welsh economy.

NHS Trusts

Mr. Alex Carlile: To ask the Secretary of State for Wales if he will indicate how many hospitals in Wales have applied for NHS trust status.

Mr. David Hunt: The Pembrokeshire national health service trust will become operational on 1 April 1992. Last month I announced that applications had been invited from 14 units for NHS trust status in April 1993.

Mr. Alex Carlile: Will the Secretary of State explain to me, and to my puzzled constituents, what is the point of Powys health authority's applying for trust status, given that the entity which now constitutes the health authority would also constitute the trust? Will he also tell us what the cost of a transfer to trust status would be? A Welsh Office official was unable to answer that question at a recent conference in Llandrindod Wells. Finally, will the right hon. Gentleman explain what the trust could do that the district health authority, under its present management, could not?

Mr. Hunt: There has been a positive move towards NHS trust status in Wales. It now seems likely that 65 per cent. of acute services could be trust-based by April 1993. Powys health unit has been invited to prepare an application for trust status in April 1993. Like the unit in Pembrokeshire, it has done that because it believes that it can satisfy the Secretary of State on four points: first, that such a move would show benefits for patients; secondly, that it would improve management capability; thirdly, that clinicians would be involved in management; and, fourthly, that the trust has a future of financial soundness. Only if it had been clearly demonstrated to me that trust status would involve a positive move in that direction would I allow such status to be assumed. There is, of course, no question of allowing any trust to leave the national health service.

Mr. Gareth Wardell: In view of the clear directive contained in the document "Caring for People" that the Government expect health providers to set up NHS nursing homes, will the Secretary of State give a commitment that there will be health providers in Wales, and that trusts will establish such homes?

Mr. Hunt: It is very much for the providers to determine the future picture. I believe that, in regard to care in the community, we in Wales are leading the way. Many other parts of the United Kingdom view our progress with some envy. As the hon. Gentleman will know, the local joint authorities—including the local authority, the health authority and the other key partners—are currently drawing up local plans for delivering services to the local community.

Mr. Burns: Does my right hon. Friend agree that the national health service management reforms, with the forthcoming trust status and record amounts of money being spent on the health service in Wales, will enable the health service there to build upon its success of treating record numbers of patients?

Mr. Hunt: My hon. Friend is absolutely right. If one compares 1979 with today, 34 per cent. more in-patients are being treated in Wales, and the number of day cases is up 227 per cent. Record numbers of patients have been treated, with record funding. I pay tribute to all those who work in the national health service in Wales for having achieved these outstanding results.

General Needs Housing

Mr. Edwards: To ask the Secretary of State for Wales how many dwellings for general needs housing were completed in the Monmouth constituency by Monmouth borough council and by housing associations in 1981 and 1991.

Mr. Nicholas Bennett: In 1981, 67 social housing units were completed. There are 108 under construction at the moment.

Mr. Edwards: I am grateful to the Minister, although he has not answered the question that I asked. I asked him how many houses had been completed in 1991, and I will tell him the answer. The local authority completed nil houses in 1991. Housing associations completed 33. The people of my constituency are appalled that Monmouth borough council has millions of pounds tied up from the sale of council houses and cannot use that money for housing. Will the Minister use his powers to enable local authorities to provide houses for homeless people, whether through local authorities or housing associations, jobs for redundant construction workers, and new business contracts for the building companies which are going bankrupt?

Mr. Bennett: The hon. Gentleman is wrong. Local authorities can use 25 per cent. of their right-to-buy receipts for capital purposes and 75 per cent. for redemption of debt on housing revenue account, and in Wales we have a special offer whereby local authorities which sell land for low-cost housing may use 100 per cent. of receipts for capital purposes. I am sorry that local

authorities throughout Wales, whose total debt on housing revenue account amounts to £1.1 billion, redeemed only £14 million of that debt last year.

New Houses

Mr. Flynn: To ask the Secretary of State for Wales what new initiatives he intends to introduce to increase the rate of new house building in Wales.

Mr. Nicholas Bennett: A wide range of measures has been introduced, including shared ownership, plots for sale, partnership schemes and flexi-ownership.
My recently announced initiative on bringing into use empty flats above shops will help to increase the total stock, as will the further reductions in mortgage rates announced last week and the suspension of stamp duty.

Mr. Flynn: What would the Minister say to a constituent of mine whose business has been wrecked by the Government-created recession, whose home is to be repossessed this week because the Government's rescue scheme is too late and inadequate, and whose family face bed-and-breakfast accommodation because the local council has no council houses to offer because the Government have cut council house building in Wales by 90 per cent? Who is to blame? Is my constituent right to feel embittered against the Government?

Mr. Bennett: The hon. Gentleman must recognise that we face a world recession. It is taking place in France, Germany and the United States. There has even been a reduction in Japan. We have the benefit of a Conservative Government who will put the battle against inflation at the head of their priorities for dealing with the recession. I am confident that we shall see the end of the recession in the next few months.
As for housing in Wales, which was the basis of the hon. Gentleman's question, in the last full financial year for which we have figures, 10,000 properties were built in Wales. That means that since this Government came to power, up to the end of March 1990, a total of 117,000 new homes were built. We have added to the housing stock in Wales by more than 10 per cent. since 1979. Housing for Wales, which is charged with dealing with social housing, is on target this year to build 3,500 houses and to invest £170 million in new social housing.

Mr. Hain: The Minister's reply is arrogant and insulting. It takes no account of the massive rise in homelessness, of the mortgage repossessions in all our constituencies and of record waiting lists. Welsh local authorities have almost half a billion pounds in capital receipts. Why will not the Minister release that money, which could be used immediately to start building 100,000 new homes in Wales? He should take responsibility for doing so or accept responsibility for his party's vote at the next election, when Labour will be returned.

Mr. Bennett: As I said in answer to the previous question, local authorities can use 100 per cent. of their receipts if they sell land for low-cost home ownership. The hon. Gentleman's authority—Neath—has a debt of £25 million on its housing revenue account, yet last year it did not redeem a penny of it. Only a few months ago, Neath borough council complained that it did not have enough money for housing. In 1990 and 1991, it did not apply for any money from the top slice programme—for enveloping,


for group repair and area renewal, for the homelessness reserve, for the reserve for private or defective dwellings or for priority estates. The hon. Gentleman should ask Neath borough council why, when money has been available, it has not applied for anything in the past two years.

Mr.Flynn: rose—

Mr. Speaker: Does the hon. Member have a supplementary question?

Mr. Flynn: No. I wish to give notice that, because of the disgracefully inadequate—

Mr. Speaker: Does the hon. Gentleman wish to give the Minister notice of an Adjournment debate?

Mr. Flynn: That is precisely what I am trying to do, if
I may. I wish to give notice that, because of the Minister's disgracefully complacent answers, I intend to raise the crisis of housing in Wales on the Adjournment.

Small Businesses

Mr. Michael: To ask the Secretary of State for Wales what steps he intends to take to support the mall business sector in Wales and to encourage its expansion.

Sir Wyn Roberts: We shall continue to place a high priority on supporting the small business sector by a wide range of programmes of assistance implemented through the Welsh Development Agency, the Development Board for Rural Wales, training and enterprise councils, local enterprise agencies and the Welsh Office.

Mr. Michael: May we have a pause in the ministerial litany of self-praise and complacency to recognise the reality of the interest rate burden, the impact of stop-go, the abandonment of research and development, the neglect of training and education and the fact that, because of Government policy, the nightmare of bankruptcy and failure is faced daily by those who run small and medium-sized businesses in Wales? With the threat of the election staring Ministers in the face, will the Secretary of State stop being complacent and persuade Cabinet colleagues to change their policies to ones that will create opportunity and stability for our business community in Wales?

Sir Wyn Roberts: The hon. Gentleman seems to be excelling in gloom and doom today. My reply to him is the same as the one that I gave the right hon. Member for Llanelli (Mr. Davies), in which I said that VAT registrations had increased by 25 per cent. since 1979. The hon. Gentleman referred to the problem of high interest rates. Yes, they are a problem, but we have had to impose them because of inflation. As inflation is low, the prospects for the future are good, especially if the Government are returned to office. We are the tax-cutting party; Labour is the tax-increasing party. My right hon. Friend the Prime Minister was absolutely right to describe it as a "spend, spend, spend" and "tax, tax, tax" party.

Sir Anthony Meyer: Does my right hon. Friend accept that, in particular, the tourist industry and many other small businesses in my constituency, which are dependent on flexible working hours, part-time arrangements and appropriate salaries to match, would be devastated by the Labour party's minimum wage policy?

Sir Wyn Roberts: I entirely agree with my hon. Friend. The tourist industry employs 90,000 people in Wales on the basis that my hon. Friend described. I can think of nothing more destructive than the Labour party's proposals.

Labour Statistics

Mr. Win Griffiths: To ask the Secretary of State for Wales how many men and women, full and part-time, were in employment in Wales and Mid-Glamorgan in (a) June 1979, (b) June 1987 and (c) the latest date for which figures are available.

Mr. David Hunt: The figures on the basis requested by the hon. Gentleman are not available for Mid-Glamorgan or for part-time male employees, but for Wales, taking September 1991 as the date for which the latest figures are available, there were respectively 618,000, 498,000 and 501,000 male employees in employment. For the same dates, there were 250,000, 225,000 and 246,000 female employees in full-time employment and 165,000, 184,000 and 213,000 in part-time employment.

Mr. Griffiths: Does not the Secretary of State feel any remorse about those figures? They show that male employment has gone down massively, that there are some additional jobs for female workers—full and part-time—but that the overall picture is one of deficit, despite the record investment based on the quality of the Welsh work force. Is the right hon. Gentleman prepared to say whether he thinks that before the next election these figures will improve, or will they get even worse?

Mr. Hunt: I regret that the seasonally adjusted figure went up by 700 to 121,600 last month, but I remind the hon. Gentleman that in January 1986, the figure was over 170,000. Since 1986 there has been a remarkable reduction, especially in the figure for the long-term unemployed. In January 1986, that figure was 78,014. It has now fallen 60 per cent. to 31,207, but, of course, there is still work to be done. However, I hope that the hon. Gentleman will recognise that earlier today I announced record inward investment figures for Wales, and we have every right to be proud of those figures.

Mr. Wigley: Does the Secretary of State notice that 12 months ago every vacant job in Wales was chased by nine unemployed people but that by last month 13 unemployed people were chasing each vacancy? Over the same period, small countries such as the Netherlands and Portugal and, indeed, larger countries such as West Germany and Japan, had a reduction in unemployment, so it is not merely a worldwide factor. Will he accept responsibility for the reduction in job opportunities in Wales and for the increase in unemployment? What is he going to do about it?

Mr. Hunt: I was pleased about the lower rate of increase last month and I very much hope that that will be the trend. Of course, there are problems, but we are far better able to negotiate those problems than we were. I believe that Wales is much better placed to ride out the worldwide recession than it has been and I can give the hon. Gentleman this pledge: I and my ministerial colleagues will continue to do everything that we can to attract investment to Wales. We have had remarkably good figures over the past year and we are determined to beat them in 1992.

Mr. Barry Jones: Has the right hon. Gentleman overlooked the job losses at Port Talbot steelworks—a great steelworks under immense pressure because of the recession engendered by his Government—and the continuing loss of jobs in the south Wales coalfields? Should not the right hon. Gentleman now apologise for the false promises that he made in 1991? Does he accept that his comment that the Welsh economy was extremely healthy smacks of the complacency of the do-nothing Government of which he is a member? His Government's record on the Welsh economy will lead to the loss of the seats of his two ministerial colleagues.

Mr. Hunt: The hon. Gentleman's cracked record does not seem to recognise that we are now in the age of disks. I am afraid that the Labour party is still in the 1960s and 1970s. I very much hope that we shall never see a return to those bad old days.
In 1979, the steel industry in Wales employed 42,000 people. Today, 18,000 people are employed producing 10 per cent. more steel. Those figures show the transformation in the Welsh economy and we are determined to see that continue. The last thing that we want is a return to the spend, spend, spend—tax, tax, tax policies of the Labour party.

Welsh Language

Mr. Butler: To ask the Secretary of State for Wales what proportion of secondary school children in Wales are educated through the medium of Welsh.

Sir Wyn Roberts: The latest figures for 1990–91 show that about 15 per cent. of secondary school pupils in Wales are being educated in Welsh-speaking schools.

Mr. Butler: Did my right hon. Friend see the survey in The Sunday Times which showed that some Welsh-medium schools offer excellent education—some of the best education in the whole of the United Kingdom? Is not that a tribute to the quality of education within them?

Sir Wyn Roberts: I agree with my hon. Friend and with the comments in the article to which he referred. The Welsh-medium schools provide a first-class education and I am happy to tell my hon. Friend that Welsh is being taught in eight out of 10 primary schools in Wales and in nine out of 10 secondary schools.

Oral Answers to Questions — ATTORNEY-GENERAL

Racial Hatred

Mr. John Marshall: To ask the Attorney-General how many prosecutions for inciting racial hatred there have been in each of the past two years; and if he will make a statement.

The Attorney-General (Sir Patrick Mayhew): In 1990, there was one prosecution for an offence under part III of the Public Order Act 1986 and in 1991, there were four such prosecutions. In 1991, proceedings were commenced in a further case, but they have not yet been concluded.

Mr. Marshall: May I thank my right hon. and learned Friend for that answer. Although regretting the need for

such prosecutions, may I congratulate him on the vigour with which he prosecutes those who peddle such odious doctrines?

The Attorney-General: I am grateful to my hon. Friend. "Odious" is the word for the publications that infringe the Act. I wish that it were possible to bring more of those who are responsible for them to justice, but, as my hon. Friend knows, because he makes a close study of such matters, it is often impossible for the police to identify those who are responsible.

Mr. Janner: May I first associate myself with the words of the hon. Member for Hendon, South (Mr. Marshall) with whom I fully agree? That the Government are now taking action is appreciated. Will the Attorney-General please assure the House that such action will also be taken against people who do not normally reside here, such as Louis Farrakhan—if by mistake he or anyone like him is allowed in—if they come to this country to try to stir up racial hatred in this decent land?

The Attorney-General: The hon. and learned Gentleman is friendly in his remarks. He should know that it is not the Government who take action in these matters, but the Attorney-General. They are extremely important matters. The hon. and learned Gentleman will know that I recently had the privilege of giving the Sir George Bean memorial lecture in which I set out in some detail to the Association of Jewish Ex-Servicemen and Women the basis for my approach to such matters. It may be helpful to me to put a copy of that lecture in the Library.

Sunday Trading

Mr. Simon Hughes: To ask the Attorney-General how many representations he has received since the beginning of December which have been critical of his reaction to Sunday opening of stores.

The Attorney-General: Including letters addressed to other Ministers and transferred to me, the answer is about 2,000. Substantive replies have been sent in almost every case.

Mr. Hughes: Does the Attorney-General accept that the many letters protesting at his view about Sunday trading, as expressed in the House, suggest that the matter should be reconsidered by the Government, especially as the approach appears to be inconsistent and hypocritical? On Sunday trading, the Government say that there is a risk that the European Court might rule against us, so they take no action. On the environmental impact assessment directive, the European Commission sent a letter before action had been taken, accompanied by a personal letter. The Government said then that although they have been told that they are in the wrong, they will do nothing about it. Surely European laws should be either obeyed or disobeyed. It should not be a matter of pick and choose, as the Government please.

The Attorney-General: It is a pity that the hon. Gentleman did not listen to my last answer. If he had, he would have heard me say that it was for the Attorney-General to enforce the law, not the Government. The answer on this subject that I gave in November made it perfectly clear that the decision is mine and nobody else's. I think that those letters show a wholly


understandable sense of frustration, but the House of Lords, before which an appeal is pending, has shown uncertainty about whether the provisions of the Shops Act 1950 remain part of our domestic law. Accordingly, the House of Lords referred the issues to the European Court of Justice so that the House of Lords could answer that question. I keep the matter under review, as I must, but in the circumstances I am not persuaded that the public interest requires me to take the necessarily large number of actions up and down the country.

Mr. Tony Banks: Action was taken on the poll tax.

The Attorney-General: Perhaps the hon. Gentleman will contrive to listen to what I am saying on this complicated matter. My jurisdiction is limited to taking action in the public interest. Local authorities have a separate and specific jurisdiction conferred on them by the Act, and the course that they take is a matter for their judgment. The environmental assessment aspect is a matter for my right hon. Friend the Secretary of State for the Environment, the relevant Minister.

Mr. Channon: Can my right hon. and learned Friend give us any estimate of the time that will elapse before the European Court gives its judgment on the matter.? Can my right hon. and learned Friend take any action to shorten that period and clear up what is a highly unsatisfactory situation, whatever view one takes on Sunday opening?

The Attorney-General: I agree that it is unsatisfactory. The Government have asked the European Court at Luxembourg to expedite its hearing. The best that I can say is that we shall receive the answer to the question that the House of Lords has asked in forthcoming months—I hope that the number involved will be few, not great.

Mr. Anderson: What is the Attorney-General's authority for saying that he cannot rely on Crown privilege in relation to cross undertakings for damages? Is not it crystal clear that the Government are willingly in collusion with those stores that are using salami tactics bit by bit—before Christmas, between Christmas and the new year and after the new year—and which so handsomely contribute to Conservative party funds? Surely, circumstances have now changed and any reasonable Attorney-General would respond accordingly.

The Attorney-General: I have not troubled to inquire whether any firm has contributed to the Conservative party—[HON. MEMBERS: "Oh."] It is a matter of total indifference to me, as it should be to the hon. Member for Swansea, East (Mr. Anderson). If he chooses to use the word "collusion", and apply it to me in that context, he is attributing dishonourable conduct—he should be ashamed of doing so.

Sir John Farr: Will my right hon. and learned Friend consider advising local authorities—which still seem to be unaware of their present powers on which they can act—and circulating information to them to tell them that if they want to come down on Sunday traders, the statute book in Britain already gives them that authority?

The Attorney-General: I understand my hon. Friend's point, but the section is entirely clear and I think that all local authorities are aware of its provisions, which place the primary duty of enforcing the Shops Act 1950 on them. There is no shortage of advice available to local authorities

to enable them to decide whether, in uncertain circumstances, it is politic for them to seek to start proceedings, whether criminal or civil. That is for local authorities to decide, and it is not for me to offer them advice.

Mr. Fraser: Does the Attorney-General agree that the defence of using the treaty of Rome in relation to breaches of the Shops Act 1950 is pretty flimsy and slender? As the European Court delays are providing a valuable premium for some people and holding up injunctive relief in this country, should not further representations be made to the European Court to deal with the problem as an injunctive matter so that certainty is quickly returned to the courts of this country?

The Attorney-General: We certainly want to know the answer and the House of Lords, which is dealing with an appeal in the B and Q case, also wants to know the answer. The hon. Gentleman is a distinguished and experienced solicitor. I do not know whether he wishes to reconsider what on earth he means by saying that it is a flimsy excuse: either it is part of the law, or it is not. So long as there is uncertainty about the matter, that must have a bearing on whether enforcement proceedings are taken by the Attorney-General up and down the country in a necessarily very large number of cases. I explained to the House in November that I do not consider that the public interest lies in my taking that very large number of proceedings up and down the country in those circumstances. Whether local authorities take the same view in their own jurisdictions is a matter entirely for them.

"Spycatcher"

Mr. Tony Banks: To ask the Attorney-General what progress he has made in identifying the total cost of the "Spycatcher" litigation.

The Solicitor-General (Sir Nicholas Lyell): The total cost to the Government to date, excluding the contempt proceedings and officials' time, is calculated at £2,221,503.

Mr. Banks: As the Solicitor-General said, that excludes officials' time, so the figure must be that much higher. Is it not outrageous that so much British taxpayers' money should have been spent trying to suppress a book which in part told us about the treacherous activities of the security services in trying to undermine the democratically elected Government of Harold Wilson? Will the Solicitor-General assure the House that similar treacherous activities will not take place when the next Labour Government are democratically elected under my right hon. Friend the Member for Islwyn (Mr. Kinnock)?

The Solicitor-General: Whatever one thinks about the activities of the author, he was a former member of the security services. These cases have the very valuable result of getting a clear decision from the House of Lords, upheld in this respect by the European Court of Human Rights which took nothing from that decision, that such former members owe a lifelong duty of confidentiality.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Iraq

Mr. Cohen: To ask the Secretary of State for Foreign and Commonwealth Affairs what additional resources will be made available to improve health care for vulnerable groups in Iraq.

The Minister for Overseas Development (Mrs. Lynda Chalker): I have recently approved an additional allocation of over £1 million in aid for vulnerable groups in both the north and south of Iraq. Last week, I approved a further £345,000 for the British Red Cross. On 8 January I called for a high-level meeting of donor countries to respond to the United Nations latest humanitarian appeal. That has been favourably received.

Mr. Cohen: Has the Minister seen the statement made at the weekend by the Red Cross stating that without aid, the whole of Iraq faces massive starvation? Has she seen the Quakers report which states that tens of thousands of children are in jeopardy and thousands will die because of the lack of essential medicines? Is it not now time to lift the economic sanctions that are killing people, including children, in Iraq and to inject a huge amount of those essential medicines which are in short supply there?

Mrs. Chalker: First, I pay tribute to the British Red Cross and the many non-governmental organisations which have provided help in Iraq supported by money from the Government. We shall continue to support them, as my main answer to the hon. Member for Leyton (Mr. Cohen) made clear. However, with regard to the hon. Gentleman's request that we should lift sanctions, I am afraid that he is way out of line. The needs of the Iraqi people can be met by the release of $1.6 billion of oil which would finance the purchase of essential humanitarian supplies to relieve that suffering. We continue to help in the meantime, and at a diplomatic level, we are working extremely hard to have Security Council resolutions 706 and 712 implemented. When that is achieved, the problems referred to by the Red Cross and the Quakers report will be substantially minimised.

Miss Emma Nicholson: In paying tribute to those excellent voluntary organisations whom the Government have grant-aided to help vulnerable groups in Iraq, does not my right hon. Friend the Minister agree that Saddam Hussein has ensured the continuing torment and lack of help for his people, particularly for the southern Shias in the marshes?

Mrs. Chalker: My hon. Friend is right. Saddam Hussein continues to ignore the needs of the Iraqi people, particularly those in the south who have had less publicity than the Kurds in the north. Both need our help, but the help that they should be given is by their own Government, by the full implementation of resolutions 706 and 712. We are doing our best to make progress in the talks so that the Iraqi people will get the benefit of the export of Iraqi oil in the near future.

Mr. Winnick: Is it not clear to the Minister that we should be concerned, as my hon. Friend the Member for Leyton (Mr. Cohen) has stated, about the plight of the people of Iraq and the starvation that is being caused? Is it not the case that as long as Saddam Hussein rules that

country—as long as that brutal and murderous despot continues in power—there will be absolutely no solution for people in that unhappy state?

Mrs. Chalker: The hon. Gentleman knows that I believe that the Iraqi people will be safeguarded for the long term and enable the international community to give long-term development aid to that country only when Saddam Hussein is no longer at the helm in Baghdad. It is a very serious situation. The humanitarian groups have done extremely well. Bearing in mind the £45 million which this country has given since April, I can assure the hon. Gentleman that we will continue to play our part. However, their only true relief, as everybody in the House and in the country knows, is for Saddam Hussein to be replaced.

World Population Conference

Mr. Steen: To ask the Secretary of State for Foreign and Commonwealth Affairs if the Minister for Overseas Development will attend the conference from 31 January to 1 February 1992 for European parliamentarians on action on world population, sponsored by the British parliamentary group on population and development.

Mrs. Chalker: I much regret that I will be unable to attend that conference because of my forthcoming visit to southern Africa. My noble friend the Earl of Caithness has agreed to attend in my place. My officials will play a major role in support to European action on world population. I look forward to the conclusions of the conference with considerable interest.

Mr. Steen: The House is sorry that the Minister cannot attend the conference. All European Members would have liked to pay tribute to the splendid work that she and the Government have done for overseas development. Does my right hon. Friend agree that the ever-growing problem of street children is a consequence of overpopulation? Does she consider that some new initiative is needed to stem police brutality in countries such as Brazil—where there are 10 million street children—Guatemala, Mexico and other countries? Would my right hon. Friend feel able to lead a crusade with other European countries to put pressure on the Governments of central and south America so that every child there has a home, food, clothing and education and is not allowed to fall prey to the worst excesses of human nature?

Mrs. Chalker: I agree that the situation for street children not only in Brazil and Guatemala but in certain other countries is extremely serious. That is one good reason why we have been supporting several nongovernmental projects in the region and why we have made representations to presidents and other leaders about the state of children in those countries. It is difficult to provide advice on population planning in some Catholic countries, but I am pleased at the progress that we are beginning to make. The more children who are born by choice and not by chance, the better, as we said in August of last year when working our our programme.

Sir David Steel: Although it is understandable that the Minister cannot be in two places at once, will she assure the House that her noble Friend will make a strong contribution to the conference? Does she agree that some


of our overseas development programmes have been vitiated by the rise in population in some of the countries concerned?

Mrs. Chalker: I can assure the right hon. Gentleman that my noble Friend will make a very strong statement of Government policy, even though I wish that I could do it myself. Of course the increasing population in some countries is harming the progress that they could otherwise make on development issues. However, it is good to note that because the contraception prevalence rate has increased considerably since 1985 in countries such as Bangladesh and a number of African countries, we are beginning to make more progress. By spending more resources on this matter, as I intend to do, having tripled our programme in the past 10 years, I believe that we shall make still further progress, with the help of education, too.

Sir Charles Morrison: Although I fully understand why my right hon. Friend cannot attend the conference of Parliamentarians, will she tell the House now whether the Government support the recent call by Mr. Robert McNamara for a global commission on population in preparation for the 1994 United Nations conference on population? Secondly, are the Government currently involved in giving advice or assistance to the Russian republics and to other east European republics?

Mrs. Chalker: In answer to my hon. Friend's first question, we believe that the UN conference on population in 1994 will he an important focal point and that all possible work to support it should be carried out. We have

not yet concluded whether that work should be in the form suggested by Mr. Robert McNamara or be carried out in other ways. Nevertheless, we shall support such work.
In answer to the second part of my hon. Friend's question about population planning assistance to the former Soviet Union, although we have not been asked for such help, last week I agreed that £2 million-worth of medical aid should be spent in the republics of the former Soviet Union. That aid is already going out, starting with a specific gift that was made today in Moscow.

Mrs. Clwyd: In so far as the population of Africa, and especially that of Somalia, is clearly at risk from internal conflict and where the aid agencies cannot deliver any assistance because of that conflict, is it not time for the British Government to urge the United Nations to take a more interventionist and far stronger role in resolving those disputes?

Mrs. Chalker: Having visited homes for abandoned children in Somalia a couple of years ago, I can well understand concern not only about young children in that country, but about all its people. That was why, when meeting the United Nations new Secretary-General, Dr. Boutros Ghali, last Monday, I took the opportunity to suggest to him the need for more action in Somalia. James Jonah's visit on behalf of the secretary-general looks like producing some suggestions, but we shall continue to fund British non-governmental organisations that are providing relief in Somalia in the form of both food and medicines. We hope that there will be peace soon so that we can do still more effective work.

Northern Ireland (Security)

The Secretary of State for Northern Ireland (Mr. Peter Brooke): I have to report to the House with deep sadness that, shortly after 5 o'clock on Friday afternoon, seven construction workers on their way home from work were killed and seven were injured, five very seriously, when their minibus was blown apart in a massive explosion at Teebane Cross, on the main Omagh to Cookstown road in County Tyrone. The police investigation is continuing, but it is believed that two plastic barrels containing some 300 lb of home-made explosive were placed beside the roadside hedge and detonated by command wire from a vantage point overlooking the scene. The Provisional IRA has admitted that it carried out this mass murder. In addition, in the first three weeks of the year, five other people—all civilians—have been murdered by terrorists.
I know that the House will join me in extending deepest sympathy to the families, friends and colleagues of all those killed or injured, and in utter condemnation of these attacks, which demonstrate the profound depravity and moral bankruptcy of terrorism. All those killed or injured were working men going peacefully about their lawful occasions, yet the terrorists did not hesitate to murder or maim them.
In the face of such unmitigated evil, the reaction of the community and the Government is one of grief and of righteous anger; but I and my colleagues are absolutely determined that it must also be one of resolute and vigorous action. No society which believes in democratic values can allow the ballot box to be overridden by the bomb and the bullet. Violence has not brought, and will not bring, the terrorists any advantage. The democratic path is the one that we shall tread, and we shall go where it leads, not where terrorists seek to direct.
The first task for Government is to ensure that the security forces have the resources—legal and material—which they need. It is for the security force commanders to ensure that all the resources available to them are used with the maximum effectiveness. Both the level of available resources and their deployment are constantly adjusted as necessary to counter the foreseeable threat. When we judge that additional resources are needed, they are made available. My hon. Friend the Minister of State announced on Saturday that extra troops would soon arrive. They are already on patrol. In addition, extra troops are also now in the Province in support of a specific operation to enhance the security and to improve the effectiveness of vehicle checkpoints in Fermanagh.
We know that the terrorists can kill, but they cannot win. No democratic Government or society can allow such people to prevail. Nor will we. The security forces will continue to prevent or deter, as they are now doing, by far the largest part of planned terrorist activity. They will also do everything practically possible to protect the public. With the assistance that is increasingly forthcoming from ordinary members of both sides of the community, they will resolutely and successfully pursue not just those who carry out terrorist attacks hut also those who plan them. They will do so within the law; and they will continue to bring the criminals before the courts. That is the only way for a civilised democratic Government to deal with terrorism.
I wish to add a personal word on a subject related to recent events, in which I played a personal role. The decision to maintain the acceptance of a long-standing invitation to go on Mr. Byrne's show in Dublin on Friday night was prompted by the opportunity that it afforded to speak to the people of the Republic of Ireland about terrorism and the response of a democratic society. Yielding to an unsignalled invitation to sing on the show was innocent in intent, for reasons which are personal to myself, but it was patently an error. Through you, Mr. Speaker, I wish to apologise unreservedly to the families involved in Friday's bombing, to those who represent them in this House, and to all those in our wider society who would have taken wholly justified offence.
My commitment to Northern Ireland and its people is, I think, familiar to the House. It is because of that commitment and my understanding of the values and decent opinions of the Province that I have placed my resignation at the Prime Minister's disposal. I also advised him that if he were not to accept it on the spot he should defer any decision on it until after he had concluded his coincidental visit to the Province today.

Mr. Kevin McNamara: I thank the Secretary of State for his statement. On behalf of the Opposition, I join with him in extending sympathy to the families whose lives were shattered last Friday by the IRA's vicious murder campaign. This afternoon, the House must demonstrate its united determination to resist terrorism. We must give a clear and simple message to the IRA and other organisations which emulate its savagery. There are no legitimate targets, be they members of the security forces or civilians. We will not give way to those who mistakenly believe that power grows out of the barrel of a gun. They can play no part in any inclusive dialogue which can create a genuine peace process.
The IRA should have no illusions that it can bomb and shoot its way to the conference table, for it cannot. No one who seeks to impose his will by terror can have a constructive role to play in the resolution of the conflict in Northern Ireland. No one who is responsible for massacring his fellow citizens will be accepted as a partner in the effort to bring peace to Northern Ireland.
There is a legitimate expectation that the Government will provide the resources, in terms of both personnel and finance, to ensure the security of all the people of Northern Ireland. Can the Secretary of State therefore confirm, as he did in part today, that the Government will meet that expectation? In this time of sorrow, when many people are close to despair, we must remember the many occasions on which the Royal Ulster Constabulary and the security forces have thwarted the evil enterprises of the terrorists. In the words of Sir Hugh Annesley, it is slow, patient and incremental police work that will succeed in defeating this evil; there is no quick fix.
The people of Northern Ireland and, indeed, of Britain and the Republic expect their constitutional politicians to put aside their differences in pursuit of a peaceful political solution and to raise no false obstacles to sitting down to discuss matters among themselves. We heard at the end of the statement a characteristically honest and courageous statement by the Secretary of State. Those who have worked with him during the time that he has been in his present post have come to admire the hard work, courage and assiduity with which he has pursued the object of bringing the parties within the island of Ireland to sit down


with the British Government and resolve their differences. What happened on Friday night happened, but in my humble opinion it never was, nor should it be regarded as, a resignation matter.

Mr. Brooke: I am grateful to the hon. Gentleman, not only for his robust statement about democracy but also for his very kind personal words.
I confirm that the Government will meet the expectation in terms of personnel and finance. I agree that patient work by the Royal Ulster Constabulary, supported by the other security forces, is the key to these endeavours. In the searches in Belfast over the weekend of 11 and 12 January, which on three occasions revealed a mass of destructive material, we had an outstanding example of that patient work.

Mr. William Ross: The House will be aware that Ulster Unionist Members bitterly regret the need for the Secretary of State's statement. It will be aware also that we have a long, deep and bitter disagreement with the Government over their whole political and security policy in Northern Ireland. However, we believe that it was right that the statement should be made in the House, from which have come the decisions that, in our opinion, have done so much to encourage the IRA through the years. I sometimes think that if the mutilated bodies of those who have been killed were laid out on the Floor of this Chamber the consequences of the decisions of those who sit here might be more effectively brought home to them.
Is the right hon. Gentleman aware that a leading Northern Ireland member of his own party recently described security in the Province as a joke? For the past 23 years Unionists have been saying exactly the same thing with regard to both security policy and political policy. To the people of Northern Ireland the Prime Minister's "no change" comment is simply a promise of more of the same. If the Government are not prepared to tolerate a situation of continuing violence six years after the previous Prime Minister first uttered those words, let them forsake that which has failed.
Does the right hon. Gentleman understand that we very much welcome his commitment to taking the path of democracy regardless of where it leads? Indeed, that was
the policy espoused by two Members of this House—Airey Neave and Ian Gow—who were murdered. If the Government were to decide to take that route, their decision would be very welcome in Northern Ireland.

Mr. Brooke: I am grateful to the hon. Gentleman for expressing his approval that a statement should be made today.
In reply to his observations about security, I should point out that in recent weeks the Chief Constable indicated that four out of five terrorist attempts are prevented and interdicted as a result of the work of the security forces. It is, of course, a matter for concern that there should be the fifth. The manner in which the security forces in Northern Ireland conduct themselves commands the admiration of all, and I am quite certain that the hon. Gentleman did not intend to impute any lack of commitment to them.
In reply to the hon. Gentleman's comment about the Government's policy since 1985, I should make the point that I have been Secretary of State for two and a half years of that period. There are moments when I think that it may

be that insufficient attention is paid to the coincidence of the Anglo-Irish Agreement with the upsurge in the supply of Libyan arms, which made a very considerable difference to the armaments of the IRA.

Mr. Clifford Forsythe: I should like to express here, as I have done outside the House, my deepest sympathy to the bereaved and to the families of those who were injured. I assure the Secretary of State that the people in my constituency are no longer impressed by congratulations on their resistance to terrorism. They want positive, active measures to bring these devils to justice.
My people feel that the right hon. Gentleman would have been better employed if he had rushed to comfort the bereaved rather than carry out a song-and-dance act among people in Dublin, or even watch a rugby match. That is the opinion of the people I represent. However, the right hon. Gentleman has shown that he is indeed a right honourable gentleman, and for that he deserves great credit.
What steps were taken to protect the employees of this firm following an explosion that took place some time ago and that could have killed as many as were killed this time?

Mr. Brooke: I recognise the force of feeling that prompted the hon. Gentleman to speak in the way that he did on behalf of his constituents. There will be a thorough investigation, which will address all the circumstances, into this attack and that journey.

Mr. Peter Robinson: I express my sympathy, along with that of my two parliamentary colleagues who are at funerals in Northern Ireland, for the families of those who have been killed and send our sincere wishes to those who have been seriously injured for a speedy and full recovery.
I add my voice to the condemnation of the activity of the Provisional IRA which has pertained in Northern Ireland for more than 20 years and which in this case was clearly sectarian as it killed seven Protestant workers. Actions of evil and barbarism are its stock in trade.
May I ask whoever may hold the Secretary of State's office, whether the right hon. Gentleman or his successor, to recognise that the policy in security has failed? Its failure can be seen in the graveyards across Ulster. We need not a tinkering with security policy—a change here and a change there—but a root-and-branch change in security policy so that it changes from a reactive one to a proactive one and becomes a policy of going after the IRA, of taking the fight to the IRA. That will put us on the route to victory over terrorism.

Mr. Brooke: I join the hon. Gentleman in his moving remarks about graveyards across the Province and in his condemnation of sectarian attacks such as that which occurred on Friday last week. I understand the feeling within his party that has given rise to some of the security recommendations which he conferred on my hon. Friend the Minister of State last week, and which he described as a root-and-branch policy. However, I am not sure that everybody who looked at what can and should be done in the Province would necessarily agree with all the elements of the policy that he put forward.

Mr. John Hume: I join the entire House in utterly and unequivocally condemning the atrocity that led to the Secretary of State's statement. Seven people, most of


them young people and all from the Protestant community, were murdered, and murdered for exercising one of the most fundamental rights of all—the right to work. They were also exercising their right in keeping with the loyalty with which they were born, as they were helping to rebuild a security station. Presumably, those who murdered them were also born with loyalties. The answer to divided loyalties and different loyalties is not murder; it is respect—respect for the differences and an accommodation of those differences.
Achievieng that accommodation is the challenge that faces the House, the two Governments involved and all the parties in Northern Ireland. I ask both Governments to intensify their co-operation in order to achieve that aim. If certain parties refuse to co-operate, we should get on with it anyway, and leave no vacuum to be filled by murders such as those which happened on Friday.
As to the Secretary of State's personal statement, as he knows, we do not always agree about everything, but we very much appreciate the efforts that he is making to bring everybody around the table. If the process is to be continued, I hope that his Prime Minister will ensure that he is there to continue it.

Mr. Brooke: I am grateful to the hon. Gentleman for his remarks, and not least his closing remarks. He has been a doughty fighter over a long period in favour of the use of democracy and dialogue and in condemnation of the use of violence. If this incident plays a part in intensifying the co-operation between the two Governments on security policy, I think that good will have come out of it. I agree with the hon. Gentleman, however, that all of us who are engaged in the democratic affairs of the Province—that does not simply involve Governments; it involves also political parties—have a joint responsibility to see whether we can advance matters by way of dialogue.

Mr. James Kilfedder: I know that it would be the wish of my constituents that I should convey heartfelt sympathy to the bereaved and the injured in their grief and agony. For more than 20 years the IRA has been executing a horrendous campaign of genocide against the Protestant community, and in the names of the thousands of dead and injured I urge the Government to take the war to the terrorists. That would need the full, undivided and unambiguous support of every decent person in Northern Ireland, and the support of the Dublin Government, who have equivocated too often in the past.
I repeat a suggestion that I made to the Secretary of State at the time of the last atrocity in Northern Ireland. I asked the right hon. Gentleman to appeal to the Roman Catholic Church to excommunicate the terrorists—the evil gang of murderers, and their supporters and helpers. I was interested to read in a Northern Ireland newspaper today that the Roman Catholic Archbishop of Tuam had considered the same proposal.
I wish to refer to the personal statement which the Secretary of State made. I think that his decision was an honourable one and one which we would expect from an honourable man. I pay tribute to the efforts that he has made since he has held the office of Secretary of State to bring all constitutional politicians together. There is still hope that talks can succeed. I point to the last Northern Ireland Assembly, of which I had the honour of being

Speaker. The Members of that Assembly worked for the good of everyone in Northern Ireland, regardless of religion or politics.

Mr. Brooke: I appreciate the personal remarks made by the hon. Gentleman.
When he talks of taking the war to the terrorists, I must reassert from the Dispatch Box that the actions of Her Majesty's Government, and of the security forces on their behalf, will be conducted under the rule of law and that the rule of law will not be thrown away, for that would be a concession to the terrorists.
It is at times suggested that the security forces are operating under a series of shackles, which it is sometimes suggested are of a political nature. I know of no such shackles.

Mr. Alex Carlisle: May I and my right hon. and hon. Friends join in expressing sympathy for those who died or were injured in the atrocity in County Tyrone on Friday? It was murder of extreme wickedness. May I also say on behalf of my party that the personal code of conduct of the Secretary of State is an example to us all? I urge upon him that he should not resign. If certain others were in tune with his message of peace, we should see much quicker progress in Northern Ireland.
Will the right hon. Gentleman agree that he should hold his nerve to the twin track of political progress and strong security? Will he agree also that it would be a serious mistake to abandon the high standards of justice to which we try to keep as a reaction to these events and the evil in Northern Ireland that took place last Friday?
Does the right hon. Gentleman share with me the view that nobody should be allowed to bomb his way into any forthcoming general election campaign? Surely all political parties would do well to agree that there is to be no political vacuum in Northern Ireland and that we are determined to fight for peace as the future of Northern Ireland.

Mr. Brooke: I appreciate the hon. and learned Gentleman's personal remarks. I confirm that the Government's nerve will hold in the context of the twin track of political progress and a robust security policy conducted under the rule of law.
In addition to what the hon. and learned Gentleman mentioned, the Government are preoccupied with social and economic development. Dire though the attacks on Belfast have been during the past two months, it is a sign of just how successful economic development has been that the IRA should have felt it necessary to retaliate in the way that it has.
On the question of the period between now and the general election, obviously I cannot predict the exact course that events will follow. I share the hon. and learned Gentleman's view that if we can avoid a vacuum, that will be in the interests of a democratic society.

Mr. John Biffen: May I assure my right hon. Friend that, in my judgment, it is both correct and entirely characteristic that he should offer his resignation? Whatever the outcome of that gesture, I hope that he will be reinforced and fortified by the knowledge that the whole House recognises the formidable qualities that he has brought to one of the most taxing posts in Government.
May I say, as every other hon. Member would wish to say, that we condemn that act of violence—indeed, that act of war, for that is what it was—and have great sympathy with the victims? However, if justice and peace could be secured by this House passing ritual condemnations, Northern Ireland would be the most pacific province in Europe.
We are once again confronted with the fact that there can be no progress in Northern Ireland without greater military security. Although I appreciate that no one should at present, and on the Floor of the House, talk lightheartedly about the deployment of military forces in Northern Ireland, will my right hon. Friend bear in mind the considerable virtue that many would feel if the border with the Irish Republic were more effectively supervised hereafter?

Mr. Brooke: I am grateful to my right hon. Friend for his generous personal remarks. Of course, I endorse what he says about justice and peace and about the need for greater military security. I hoped that I had made that clear in an earlier answer. The fact is that everything else that occurs in Northern Ireland must be sustained by the quality of the security policy.
I agree with my right hon. Friend about the significance of the border in the campaign in which we are engaged. There is no doubt that the scale of the weapons brought from Libya in the period before the Eksund was apprehended by French Customs has made a considerable difference during the past five or six years. It is known that that material is stored in the republic and then brought north for use by the terrorists. Of course, it is also used by those terrorists who choose to reside in the republic. Better maintenance of the border is a central factor in our policy and it is very much at the heart of the arrangements and agreement that we have with the Irish Government.

Mr. Merlyn Rees: The right hon. Gentleman should not consider resigning over the affair in Dublin. The strong views expressed on both sides of the House—which in itself is unusual, divided as it is in its political structure—on the way that the right hon. Gentleman has carried out his job should send a clear message to the IRA: that it will not bomb its way to the conference table; it will not affect us now; it will not affect us during the general election; and it will not affect us after the general election. Such unanimity is unusual in this House, so the IRA should note that message.
There is no quick fix for security in Northern Ireland—and I know that the right hon. Gentleman does not think that there is—whether in dealing with last Friday's incident or, sadly, the tit-for-tat murders that follow. There is no easy way and internment is not the answer. Will the right hon. Gentleman study the battery of legislation available in the Province to determine whether it could be used more effectively by the security forces to interrogate people? That is what people sometimes have in mind, but think that it should be done by internment. I believe that it can be done without internment.

Mr. Brooke: I pay tribute to the quality of the testimony given by the right hon. Gentleman—the only Back-Bencher who has held my office—about the way in which democracy is defended against the forces of darkness in Northern Ireland. I shall, of course, establish whether we can use elements of the legislative battery that is available to us in a different way from the way in which

it has been used until now. If the right hon. Gentleman wishes to make any suggestions privately, I shall be very grateful for them.

Mr. Julian Amery: I accept everything that has been said by right hon. and hon. Members on both sides of the House about the need for a stronger line against terrorism. Does my right hon. Friend agree, however, that for 20 years he and his predecessors have pursued the will-of-the-wisp of power-sharing, devolved government; and that, for as long as it is pursued, the IRA will believe, rightly or wrongly, that it will get us out in the end?
Has not the time come at last—some of us have been saying this for a long time—for my right hon. Friend, or his successor, to consider seriously the alternative policy that many have advocated: administrative devolution, or short-term integration? Is that not the only way to make it clear to the IRA that there can be no question of the United Kingdom's abandoning the Province?
As for my right hon. Friend's personal position, may I express my admiration for the frank and manly way in which he has offered his resignation? Occupying, as he does, what is virtually a vice-regal position, only he can judge whether he can maintain his authority after the visit to Dublin. That is above all a matter for him to decide; but I very much admire the way in which he addressed the House with his habitual frankness.

Mr. Brooke: I am most grateful to my right hon. Friend for his kind closing remarks.
I am aware that what the Government have latterly pursued has been periodically categorised as power-sharing devolution. The Government's view has been that, if we are to have a system that will work and last in Northern Ireland, it must be a system on which agreement can be obtained around the table, and on which the endorsement and the thumbprints of all involved in constitutional politics in the Province can be secured. We have kept an open mind about what that system might be. In my opinion, the sooner that we return to serious discussion about the government of the Province, and about the other considerations that were invested in the earlier talks, the better the people of Northern Ireland will be served.

Several Hon. Members: rose——

Mr. Speaker: Order. I appreciate that there is great interest in this serious matter, but we have another statement, and there is great pressure on the subsequent debate. I shall allow three more questions from each side, but I am afraid that after that we must move on.

Mr. David Winnick: I strongly disagree with the political intervention of the right hon. Member for Brighton, Pavilion (Mr. Amery). What evidence is there, however, that, after nearly 22 years of sustained terrorist atrocities, the Provisional IRA is any nearer to achieving its objectives than when it started its activities in 1970?
If the country and the House have refused, since then, to give in to terror—despite all the horrors that have been inflicted against humanity on the mainland and, especially, in Northern Ireland—why should the leadership of the Provisional IRA and its fellow travellers, wherever they may be found, conclude that we shall give in to terror during the next 21 years?

Mr. Brooke: The hon. Gentleman's attitude to terrorism always does him immense credit. I am grateful to him for what he has just said. I confirm that no progress of any sort has been made by the Provisional IRA towards its objective.
If I may hark back to the answer that I gave to the right hon. Member for Morley and Leeds, South (Mr. Rees), one of the areas on which there has been a significant concentration by the Government and the security forces in recent years is the financial resources available to terrorists—I hasten to say on both sides of the community. There is not only anecdotal evidence but a fair amount of proxy evidence now that that is working.

Mr. Peter Temple-Morris: Does my right hon. Friend accept what is becoming obvious by now—that many of his hon. Friends, and Members in all parts of the House, have no wish or even thought that he should resign over this issue, or that my right hon. Friend the Prime Minister should see fit to accept his resignation? Does he recollect that during the talks last summer that he strove so hard to make successful the IRA, at least for a time, was marginalised? Does he further agree that the best security for the people of Northern Ireland is in talks and an agreement between political leaders and parties within Northern Ireland so that they may govern their own Province in the interests of all its people? Does my right hon. Friend think that, election or no election, the sooner they get on with it the better?

Mr. Brooke: It was, I think, common cause among all of us who were involved in the talks last year, and who, I hope, will be involved in the talks in the future, that they are not peace talks per se; they are talks about a political settlement, not only in terms of Northern Ireland but in terms of the relations between Northern Ireland and the republic and between Great Britain and the republic. However, my hon. Friend is perfectly correct: if we can make constructive progress along those lines, one of the consequences will be that we shall marginalise the terrorist.

Mr. Harry Ewing: I join with colleagues in all parts of the House in sending my deepest sympathy to the relatives of those who lost their lives in Friday's slaughter. May the House not forget, through the Secretary of State, the workmates of those relatives who I am sure today, as they go about their legal business and pursue their employment, must have their own personal thoughts against the background of Friday's events.
I believe that I am right in saying that the Secretary of State is a direct descendent of the famous Scottish writer J. M. Barrie. May I take the liberty of reminding the right hon. Gentleman of his relative's famous quote in relation to his own personal position: that each man's life is like a diary in which we set out to write one account and finish up writing something different and that our most humble moment comes when we compare what we have written with that which we intended to write.
In relation to the right hon. Gentleman's personal position, there is no hon. Member who believes that he intended any malice in what happened on the television show on Friday night. In the presence of the Patronage Secretary and the Leader of the House, may I suggest to the Secretary of State that his personal position, because of the very sensitive job that he does in Government, should be cleared up before this day is finished?

Mr. Brooke: In responding to the hon. Gentleman's reference to Sir James Barrie, I should say that I do not, I fear, have a drop of Scottish blood, but he was my father's godfather. The hon. Gentleman has introduced me to sayings of his in the House today that I had not previously appreciated.
As to what the hon. Gentleman said about those who worked for Karl Construction, the building firm that was decimated on Friday, let me pay here, on the Floor of the House, the most profound tribute to those in civilian employment in the Province who go to work to make it possible for the security forces to do their job.

Sir Giles Shaw: Does my right hon. Friend accept that it is right that he should restate the Government's commitment to their policy in Northern Ireland, based on the rule of law? Does not he equally expect the rule of law to be observed on both sides of the Irish border? For a considerable time, at least some of us have questioned where the IRA is trained and where it comes from. I should be glad to hear, therefore, what intensification of efforts are being made by Garda Siochana or Irish military personnel.
As regards my right hon. Friend's personal position, he is usually right and he is inevitably honourable. Although the hard and stony-hearted would never be touched by his personality, anybody with a shade of warmth would respond vigorously. I sincerely hope that he retains his position.

Mr. Brooke: I am aware, as we all are, that activities of a potentially terrorist nature occur in the Republic of Ireland. I am immensely gratified that those who participate in the activities of co-operation between the RUC and Garda Siochana say that the quality of co-operation is at its highest point for 30 years. In practical terms, it can always get better, and that applies on both sides of the border. In our relations with the Irish Government and the Garda, we are determined to secure a further contribution to the ending of terrorism in Northern Ireland. Of course, the Irish Government give us considerable co-operation, but in all these affairs—this applies to us as well—we can be still more effective than we are.

Mr. Frank Cook: I rarely comment on Irish affairs, not because of lack of interest but because the Irish communities would reject any opinion or suggestion if they considered it a "Brit" suggestion or opinion, but, in this instance, the circumstances are so hideously distressing that I feel compelled to comment and to ask the Minister whether he thinks it a heavy irony that last Friday's incident followed successive discoveries of large caches of arms and whether perhaps it was a desperate attempt by the IRA to reassert some degree of authority.
Some people complain about security, but perhaps we can all agree with the plea of the hon. Member for Belfast, East (Mr. Robinson) for a proactive rather than a reactive response. Does not the proactivity need to be politicians of all parties coming together and discussing and listening to each other rather than simply making pronouncements?
The Secretary of State is one of the few Ministers for whom I have any respect. We have had enough casualties and it would be singularly unfortunate and quite improper


to offer the IRA the additional victory of his resignation. I hope, in common with the rest of the House, that the matter is resolved today.

Mr. Brooke: The Chief Constable of the RUC, both last July and, more recently, at the beginning of December, warned of the intensification of terrorist activity. It was recognised that Tyrone was likely to be the area in which there would be activity subsequent to the activities in Belfast. I cannot comment on whether last Friday's events were reactive to the security forces' recent successes, but the searches on 11 and 12 January were, by the standards of the hon. Member for Belfast, East (Mr. Robinson), proactive exercises in terms of their success.
I am not confident about how I should take the hon. Gentleman's concluding remarks, but I shall bear with equanimity what I suspect may be a poisoned chalice.

Mr. Ivor Stanbrook: Is not it now incumbent on all decent men and women in both our countries to sink their party differences and concentrate on destroying this evil? To that end, will my right hon. Friend tell the Irish Government that their constitutional claim to Northern Ireland gives a spurious justification to the IRA's expressed determination to drive the British out of the island of Ireland? Will he also point out to the Labour party that its constant and continual opposition to the prevention of terrorism Act will deprive our security forces of the extra powers that they need to destroy terrorism?

Mr. Brooke: In terms of articles 2 and 3 of the Irish constitution, I said when I addressed the Dublin chamber of commerce on Friday in conjunction with Co-operation North that the Irish Government had made it clear that articles 2 and 3 would be on the table with regard to any talks, and that is, of itself, a reason to seek to proceed with the talks. As for the point my hon. Friend raises about the Opposition's attitude to legislation, it is up to the Opposition to speak for themselves—and I say that knowing that they will do so honourably.

European Fighter Aircraft

The Minister of State for Defence Procurement (Mr. Alan Clark): With permission, Mr. Speaker, I will make a statement about the selection of the defensive aids sub-system, known as DASS, for the European fighter aircraft.
The House will be aware that the majority of contracts for the development of this aircraft have already been let, including the radar selection which my right hon. Friend the Secretary of State announced on 8 May 1990. However, the selection of a DASS for the aircraft has remained outstanding. This system is a key element of the integrated suite of capabilities for the EFA. It will enhance the survivability and combat effectiveness of the aircraft in hostile electromagnetic environments by providing a self-protection capability, including warning of hostile missile attack and initiation of counter measures. Our Gulf experience showed this to be a crucial requirement.
The DASS is thus required to meet a most demanding specification at the forefront of combat avionics. Invitations to tender were issued to companies throughout the EFA partner nations. The EURODASS consortium led by Marconi Defence Systems Limited offered a solution, and this has been subject to rigorous scrutiny to confirm that it meets the necessary technical criteria. There have been equally difficult negotiations to satisfy the partner nations' demanding requirements.
I can now tell the House that, subject to the resolution of a number of detailed contractual points, we and our EFA partners, Italy and Spain, will endorse the selection of the EURODASS proposal. The fourth EFA partner, Germany, has not yet completed its selection process, but the option to join its partners in the EU RODASS solution remains open. I am grateful to my ministerial colleagues in Italy and Spain and their officials for their constructive and helpful approach.
The Government remain strongly committed to the EFA development programme and to the provision of high quality equipment for the armed forces. An effective DASS is essential for the EFA's survivability.
The EURODASS proposal illustrates the vitality and competitiveness of the British aerospace industry. I am sure that the whole House will welcome this further evidence that the EFA programme continues to gather pace.
The EURODASS contract will be worth around £200 million with Marconi's share at just below £100 million. It is expected to lead to the creation of some 500 new jobs, mainly at Marconi's Stanmore and Plessey Avionics' West Leigh sites, but also at a large number of sub-contractors throughout the United Kingdom.
The step that I have announced today represents an important milestone for British airborne technology, in collaboration with our partners, in a major international development project. I commend it to the House.

Mr. Allan Rogers: On behalf of all my right hon. and hon. Friends, I welcome the Minister's announcement of the contract. I am pleased that, as with the EFA radar contract, it will go to a British-led consortium. The whole House recognises the importance of the contract for the future defence needs of this country and we are pleased that the Minister has been able to lead


the negotiations to a successful conclusion. Like him, we are disappointed that Germany has not yet signed up and we hope that it finally will. The implications for our defence industry and for those who work in that declining sector are substantial. I am sure that the news will be most welcome to those whose jobs will now be safeguarded.
Although the news is positive, can the Minister now advise the House on the latest German position on the whole project? He will know, as other hon. Members do, of the considerable doubts being expressed by politicians from all parties in Germany. In the event of the Germans pulling out after the development stage is finalised at the end of the year, what will be the cost and quantity implications for the procurement of the aircraft by the Royal Air Force?
Everyone recognises Marconi's important work in support of our operations in the Gulf. We congratulate Marconi's civilian employees on their work at that time. We hope that the awarding of the contract will help to safeguard our national electronic warfare capability well into the next century. Will the Minister tell us what progress has been made on the procurement of air-to-air missiles for the aircraft?

Mr. Clark: I am glad to get the hon. Gentleman's endorsement, especially in such positive and unqualified terms. I take that as part of the Labour party's approach to defence procurement, which is to tick off each individual project, factory or programme whenever it comes before the House and to say that it fully endorses it. As we all know, that is immediately reflected in the inconsistency of Labour's accounting programme. [HON. MEMBERS: "No."] There is nothing ungracious about that comment. The sums are open to anyone who can add or subtract. I welcome the commitment by the hon. Member for Rhondda (Mr. Rogers). We can accumulate the figures and we can all do our sums.
I do not believe that my statement means that the Germans will not necessarily take the system into the aircraft that they order. However, they could end up by having to buy the system off the shelf, in which case it would be more expensive for them. The only alternative would be to put in an inferior system, which means that the German aircraft would be less capable than those in the other three air forces.
I recognise that periodic doubts are expressed about the overall German commitment to the project. The hon. Gentleman is incorrect in saying that they are shared by all political parties in Germany, although they are shared by some of them, especially the socialist parties. It is not too alarmist in looking to the future—

Mr. Rogers: The Minister does not know what he is talking about.

Mr. Clark: We are talking about the commitment of the Luftwaffe compared to that of some of the other parties. I sometimes wonder whether the Labour party, if it were ever able to do so, would consider cancelling the project and doing so under the alibi of some joint arrangement of approaching German political parties in the future. I have my doubts and I believe that many who are concerned with making the aircraft may bear those thoughts in mind. At

present, there is nothing in German policy or in service requirement terms to suggest that the Germans will get out of the aircraft.
On missile capability, as the hon. Gentleman knows and as I have announced in the House, we have invited tenders for the ASRAAM—advanced short-range air-to-air missile—capability and we are evaluating them. I hope to be able to make an announcement in the early spring.

Mr. Michael Mates: Does my right hon. Friend accept that this is excellent news for British industry, especially for the British defence industry? Will he pass on our congratulations to all those in the Ministry of Defence and in industry who have worked so hard in co-operation to continue British primacy in the project?
Does my right hon. Friend accept that, as in all co-operative and collaborative ventures, we must try among the allies to minimise the differences over such procurement projects? If we cannot collaborate in future, collectively we shall never be able to afford the best for our forces.

Mr. Clark: I am most grateful to my hon. Friend for his commendation and for the constructive attitude that the Select Committee on Defence has adopted during the past years in helping us extrapolate the various solutions towards which the project is striving. My hon. Friend put his finger on the importance of co-operation, reaching early agreement and avoiding conflict on all the separate aspects of the collaborative project, but I have no reason to believe that anything untoward is occurring. The agreement on the DASS—the fact that we were able to agree with Italy and Spain to proceed with a system, even though the Germans are currently hesitating, possibly on grounds of economy or operational requirement—seems promising. It shows that the overall project is likely to go ahead even if, at intervals, individual members of the consortium do not participate in a particular system.

Sir David Steel: (Tweeddale, Ettrick and Lauderdale): The Liberal Democrats give an unqualified welcome to the statement, which will be good for British technology, jobs and European co-operation. There have been some reports about problems with the flight control system. May we take it that today's announcement means that if there were any, they have been overcome? Would the project continue to be viable even if, unhappily, the Germans were not to adopt it?

Mr. Clark: The project is more likely to be viable if the Germans drop out of it than if the Liberal party's defence programme is ever put in place. I am sure that that programme's ultimate aspiration is for a 50 per cent. cut in defence expenditure. I am entirely confident about the present state of the project. The flight control system is not the same as the defensive aids sub-system—the two are separate—but I have no reason to anticipate any serious hold up with the flight control system.

Mr. Keith Mans: Will my right hon. Friend confirm that, while we all want the Germans to stay in the project, should they decide to withdraw from it at the end of the development phase, the aircraft would, if anything, be cheaper for the Royal Air Force and there would be increased employment possibilities in this country?

Mr. Clark: I have heard that assertion, which I find attractive and welcome, but there must be a catch in it


somewhere—more than that I should not like to say. I should certainly not wish the House to believe that a German withdrawal would lead to the whole project falling asunder. However, as my hon. Friend the Member for East Hampshire (Mr. Mates) said, it is a major international collaborative project, and the skills and technological resources of all the partners are necessary if it is to do itself justice.

Mr. Gavin Strang: The Minister knows that the statements of my hon. Friend the Member for Rhondda (Mr. Rogers) and of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) confirm that there is all-party support for the project. It is not helpful for the Minister to try to make petty political capital out of the issue. The project is of enormous importance to British industry. The research and development contract alone involves expenditure in the United Kingdom of £2.5 billion. Therefore, his statement on the allocation of the contract to Marconi and his strong reaffirmation about the project's future will be warmly welcomed. Can he confirm that everything is going broadly according to plan and that the first prototype plane is expected to fly at Farnborough this year?

Mr. Clark: I am glad to confirm all those points. I should like to repeat the tributes that I have paid to the hon. Gentleman for the support that he gave all our efforts—across party divides—to ensure that the Ferranti radar system was chosen for the aircraft in the spring two years ago. That system, in common with the others, is proceeding well.

Mr. Robert Hayward: Will my right hon. Friend the Minister continue to press the Labour party and try to establish whether it is committed to the project? I welcome what Opposition Members have said today, as I am sure my right hon. Friend does. However, we are waiting in Bristol to have the largest industrial contract confirmed, but whenever Labour Members visit Bristol, they refuse to confirm their long-term commitment to the European fighter aircraft.

Mr. Clark: As I told the hon. Member for Rhondda (Mr. Rogers), the Labour party has moved quite transparently into pre-election mode in respect of its attitude to all defence projects. Labour varies its tune according to the audience—a familiar distortion imposed by the pre-electoral pattern. Whenever Labour Members visit a factory or dockyard or stand outside the gate of a defence establishment which is threatened with rationalisation, they say, "Of course, under us, not only would it remain, but it would be expanded and we would put more money into it."
When such reports are brought to the unfortunate right hon. and learned Member for Monklands, East (Mr. Smith) periodically and he has to add up another £50 million, £90 million or £120 million, his heart must groan under that extra burden. [Interruption.] It was, I believe, a shadow Foreign Minister who came out with a lavish commitment for a fourth Trident submarine in our defence debate a few weeks ago. We could actually hear—never mind see—some of his colleagues wincing as he said that—

Mr. Speaker: Order. We are getting a little wide of the statement.

Mr. Tam Dalyell: I will not be wide of the subject. May we be told precisely why the Germans are hesitating? Is it for operational or economic reasons? The House deserves to know.

Mr. Clark: In that case, if the House really deserves to know, I suggest that the hon. Gentleman visits Germany and uses his well-established contacts there—

Mr. John P. Smith: My hon. Friend the Member for Linlithgow (Mr. Dalyell) was asking the Minister.

Mr. Clark: Indeed, but I have no responsibility for the German Government. If the hon. Member for Linlithgow were to travel around and frequent the various places where people of that mind foregather, he would probably be able to pick up a few tips and tell us all about it in an Adjournment debate.
I have no responsibility for the German Government. I imagine that, like all Governments, they are subject to the same kind of mix of political pressure, service in-fighting and conflicting operational requirements of one kind or another. However, I am glad to say that that is quite outside my responsibility.

Mr. John Wilkinson: I welcome the Government's unequivocal commitment to the European fighter aircraft represented by this important decision on the defensive aids sub-system. That will be extremely good news for the Royal Air Force and for workers in Stanmore in north-west London. Is my right hon. Friend the Minister aware that it is only a year since the RAF proved in action how important it is to have aircraft of the highest quality with an excellent electronic warfare capability? We are moving in the right direction with the European fighter aircraft.

Mr. Clark: I welcome my hon. Friend's comments. Many people who argue against the aircraft—and this is certainly true of the Germans—appear to assume that, now that the cold war is over, combat aircraft development has come to a halt and we can all continue to use the aircraft that we have until they wear out or fall apart. However, there will be a continuing requirement for serious ranking world powers—such as the United Kingdom and other Community countries—to maintain effective equipment within their air forces. Many schools believe that it is not operationally practical to go to the extent of aircraft such as the ATAs—advanced tactical aircraft—that are being developed in America which cost between $70 million and $100 million each. We will have a more versatile, more manoeuvrable and more responsive aircraft, probably with increased range, performance and climbing rates. As my hon. Friend is aware, the Rafale is another example of that. We believe that it is inferior in all those respects to the EFA. There will be such a requirement for an aircraft which will be combat capable in the first 10 or 25 years of the next century.

Mr. Michael Colvin: The House will welcome my right hon. Friend's statement which demonstrates the Government's commitment to a defence project that is essential in this day and age, despite a peace dividend, for our defence capability and also for our defence industrial capability. Will my right hon. Friend confirm that the development stage of the project is still likely to be in the order of £2.5 billion? Will he also


tell us when he expects to make a statement on the production phase of the project, which had been expected by the end of this year?

Mr. Clark: I can confirm my hon. Friend's figures. We still expect that the first aircraft will fly at Farnborough. Depending on what happens then and in the months immediately afterwards, I see no reason to deviate from the original forecasts for a statement on production.

Mr. Rogers: May I express my surprise at the way in which the Minister responded to what he acknowledged at the beginning of his statement as constructive support from the Opposition? As the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) said, the peddling of untruths by the Conservative party simply for electoral purposes is easily seen through. In every statement, we have always offered our support for the project. We have continually given unequivocal support for it. The Minister knows that, and he is telling untruths if he is suggesting otherwise. Normally, he behaves like a clown, but normally he does so without malice. That is why I was amazed at his response today. He obviously feels under great pressure because of his small majority. [Interruption.] It is small.
The reservations in Germany come from all political parties. If he reads the statements of Mr. Hauser, who is a member of the CSU, which is part of the CDU coalition, he will find that such reservations occur across the spectrum.
We do not accept criticism from the Minister. He has been responsible for the loss of 150,000 jobs in the defence industry in the past few years. The cuts that have taken place under "Options for Change" have been Treasury-driven. They were not decided by any grand defensive strategy on behalf of the Government. The Government have lurched from crisis to crisis. They have the cheek to criticise the Labour party's defence policy. Our record on defence since the war is a darned sight better than the Conservative Government's was when they consorted with the Nazis in the 1930s.

Mr. Clark: I am sorry to have wounded the hon. Gentleman. There was nothing personal about it.

Mr. Dalyell: On a point of order, Mr. Speaker. Is there anything in "Erskine May" that allows you to protect Back-Bench Members and others against flippant answers by Ministers? What have we been asked to do? We have

been, in effect, asked to go to Herman Von Richthofen, the German ambassador, and ask him, as I shall do, a perfectly legitimate question—what are the objections to the project of a major industrial power in Europe? All we are told is to go there and see it. The Government are doing the negotiating. I do not think that that is good enough.

Mr. Speaker: I do not think that anything in "Erskine May" would enable me to adjudicate on answers to questions, but I understand the reason why the hon. Gentleman has raised that point of order.

Mr. Mans: On a point of order, Mr. Speaker. I raise with you a very important point of order. We have just heard a statement on the most important military project that we have outstanding. The aircraft is built in Lancashire, close to my constituency. I note that not a single Labour Member from Lancashire is here today. Could we therefore, at the earliest opportunity, have not only a statement but a debate on the subject so that the hon. Member for Preston (Mrs. Wise), in particular, and other Labour Members can give their views on this subject, as the hon. Lady has clearly opposed it in the past?

Mr. Speaker: That is not a point of order for me. The hon. Member should raise that point with the Leader of the House on Thursday, if he catches my eye.

Statutory Instruments, &c.

Mr. Speaker: With the leave of the House, I will put together the three motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &amp;c.).

TRANSPORT

That the draft International Transport Conventions Act 1983 (Amendment) Order 1992 be referred to a Standing Committee on Statutory Instruments, &c.

TERMS AND CONDITIONS OF EMPLOYMENT

That the draft Employment Protection (Variation of Limits) Order 1992 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1992 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Wood.]

Question agreed to.

Local Government Bill [Lords]

Order for Second Reading read.

The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, That the Bill be now read a Second time.
Judging by the representation on the Opposition Benches, that is an uncontroversial statement. As this Government's local government policies unfold, and fewer and fewer members of the Opposition parties turn up to oppose us—or even to listen to us or criticise us—it has become self-evident that we are winning the intellectual debate day after day.
The Bill is about preparing local government for the 21st century. It involves a review of all local authorities so that we can bring local government closer to the people. It involves the extension of competitive tendering, which will continue the disengagement of local authorities from direct service provision and which will promote their strategic and enabling roles. The Bill requires the publication of standard performance measures, which will give local electors the information that they need to judge their own council's performance.
The new local government commission for England, which is proposed in part II, will review the structure of local government. It will have a rolling programme of reviews, examining the shire counties area by area, and assessing the case for unitary authorities in those areas. We know that most local authorities want unitary status and we believe that such status will provide a better structure for the future in most areas. However, it will be open to the commission to recommend that there should be no change to the existing structure in some areas. We have already made it clear that we do not intend that either the county or the district tier of the local authorities be abolished as a whole. People want local councils with which they can identify and local people will be given a significant voice in the commission's reviews. I expect to see more unitary authorities with a strong local identity.

Mr. Anthony Nelson (: I apologise for asking my right hon. Friend to give way so early in his speech, but I intervene on an important point. Will my right hon. Friend confirm that what really matters is the quality and cost of the local government services that are provided to the people whom we represent, yet nothing in the Bill specifically refers to that need as a criterion for change? Before a costly and traumatic reorganisation of the structure of local government is embarked upon, is it not necesary to show ordinary people that demonstrable improvements are available to them as a result of that change and that, without those improvements, there is no case for change?

Mr. Heseltine: My hon. Friend raises a most important point. If he studies the draft guidance that we have issued for the local government commission, he will see that we have placed considerable weight on the need to demonstrate that there is an economic case for change. I know that my hon. Friend will be as concerned as I am to consider that part of the legislation which provides for an extension of competitive tendering and which gives the Audit Commission the ability to reveal comparisons

between one authority, and one service, and another, which is what he is interested in achieving. I shall come to that part of the Bill in a few moments.

Sir Charles Morrison: I too am sorry to interrupt my right hon. Friend but, as his reply to my hon. Friend the Member for Chichester (Mr. Nelson) referred to the economic case for change, does he agree that if there is such an economic case for change, it must be made on the basis that where there are unitary authorities, which, as a matter of principle, I strongly support, those authorities must be of an adequate size? If we have endless small unitary authorities, we shall simply add enormously to administrative costs.

Mr. Heseltine: My hon. Friend has raised an interesting issue that will involve the House and local government practitioners in much debate in the years ahead. As my hon. Friend and I remember all too well, that was the argument that was made in the early 1970s when it was suggested that we should establish a minimum size standard to cope with the provision of certain services. However, at that time we did not give sufficient attention to the concept of an enabling authority, which has the possibility of buying in services from larger, perhaps neighbouring, authorities. Therefore, it is possible to have both a larger-scale provision of services and more local, smaller-scale authorities which buy in and then provide services. It would be wrong for us to block the option of seeking to have an advantage of scale, through private sector or other public sector providers, while placing the structure much closer to individual people.

Mr. Tam Dalyell: On a factual point, will the Secretary of State confirm that the Government are looking positively and constructively at the de minimis provision, and at providing an increase from the current level of £100,000 to about £250,000, which was promised in the debate on 17 December last year?

Mr. Heseltine: I hope that the hon. Gentleman will forgive me for being unable to identify the issue to which he refers. However, if he writes to me, I shall do my best to respond in specific terms. The de minimis provision with which I am familiar cannot be the one about which he is talking, which is the old cut-off point below which capping did not apply. As I do not wish to fail to provide an adequate response to the hon. Gentleman, perhaps he will let me know exactly what de minimis provision he has in mind.

Mr. Dalyell: I am talking about the Scottish authorities and their concern about de minimis provision.

Mr. Heseltine: In that case, the hon. Gentleman can be absolutely sure that he will receive the diligent reply from my hon. Friend the Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), to which he is accustomed.

Mr. Robert Adley: I am sorry to have to intervene in my right hon. Friend's speech when two important questions have already been asked of him. I hope that he will not be too bored to hear again my concern that we do not make the same mistakes that we made in 1972. Is he aware that there is still widespread anxiety that, when his Department establishes a commission, there will be a hidden agenda on, say, size or functions? What can he say to those of my constituents,


especially in Christchurch, the priory of which celebrates its 900th anniversary in 1994, to assure them that, contrary to the universally expressed wishes of the local citizenry, they are not likely to be subsumed into some suburban, subtopian and grotesque unit of local government, which they would detest universally, to a man and to a woman?

Mr. Heseltine: I cannot believe that my hon. Friend would suggest that I, of all people, have ever had a hidden agenda—[Laughter.] Well, I can assure my hon. Friend that the horrendous spectres which he has waved before us and which the local government commission will doubtless address do not in any way form part of our plans for the future of local government. I hope that my hon. Friend will find that a constructive reply.
Trying to address the issue of local accountability will be a crucial task for the local government commission. We are pleased that Sir John Banham, with his experience at the Audit Commission, has agreed to become the chairman of the new commission when he stands down from the Confederation of British Industry this summer. As I have already said, we have issued a draft of the guidance that we propose to give the commission. Copies have been made available to all hon. Members and we have invited views on the draft by the end of this month. The guidance should require the commission to assess community identities and the impact and effectiveness of any proposed new structure. It will be important for the commission to consider the most effective exercise of functions and the delivery of services, consistent with community identities and the wide public interest.
The commission will be able to obtain advice from other expert organisations, and particularly from the Audit Commission, to assist it in its work. However, it will be the following matters that will influence decisions.
I cannot stress too often that money spent on excessive public relations campaigns will be wasted cash. Although I have said this before, perhaps I may trespass on your tolerance, Madam Deputy Speaker, by repeating this advice to local authorities. They will not enhance their case by employing expensive public relations consultants to spend the local people's money trying to create a synthetic case, which will be looked at in great detail and dispassionately by the local government commission when it begins its work.

Mr. Eric Martlew: I have listened carefully to the Secretary of State at the Dispatch Box today. His speech was similar to that which he made when he told us that he would get rid of the poll tax. Is what he is trying to say an apology to the people of Britain who have been struggling under a local government system that has never really worked, ever since the Conservatives put it through the House in 1972? Is it not an admission of failure that he has had to come to the Dispatch Box today and introduce the Bill?

Mr. Heseltine: If what the hon. Gentleman suggests is true, the only apology that is necessary is from the Labour Government who ruled Britain for significant periods after 1972 and did nothing whatever to put the defects right. Once again, when reform is required, it is a Conservative Administration who address the issue.

Mr. Derek Enright: Apologise.

Mr. Heseltine: If another apology is required, it is from the hon. Member for Dagenham (Mr. Gould) for psyching up the level of community charge bills and encouraging local authorities to increase their expenditure, to add another burden to the tax increases with which we are already threatened by a future Labour Government. [Interruption.] Although few Opposition Members are present, I hope that they will allow me to make progress with explaining to the House the merits of yet one more piece of refreshing Conservative legislation.
The Bill sets out a framework for the procedures that the commission will follow in conducting its reviews, including the arrangements for consultation with local authorities, local people and other interested organisations. The commission will initiate a review, with publicity. If appropriate, it will outline proposals or options. There will then be an opportunity for local authorities and other interested parties to put their views.
The commission will then prepare draft recommendations and invite comments on them. We are particularly anxious that local people should put their views on the local government structure that they want to see in their areas. Once the commission has considered comments on the draft recommendations it will draw up final recommendations which it will publish and submit to the Secretary of State for the Environment. If necessary, I can ask the commission to carry out further investigations or, indeed, to supply more information. Finally, an order implementing the commission's recommendations will be laid before Parliament.
As well as conducting reviews of local government structure, the local government commission will take on the work of the Local Government Boundary Commission. It will be responsible for any reviews of boundaries and electoral arrangements which are needed as a consequence of structural review. It will also be able to carry out separate reviews of local government boundaries or electoral arrangements, at my request.
As now, there will continue to be reviews of electoral arrangements at mandatory intervals of not fewer than 10 and not more than 15 years. Therefore, the Bill also provides for the abolition of the Local Government Boundary Commission for England. Any reviews begun by the Boundary Commission but not completed by the time that it is abolished may be transferred to the new Local Government Commission. Our aim is that the commission should consider the structure of local government area by area so that it can make tailor-made recommendations for each area about the most appropriate structure to meet that area's particular needs and circumstances. That calls for flexibility. Therefore, the Bill provides for parliamentary orders to change the structure of local government area by area. Such orders will be subject to affirmative resolution procedures.

Mr. Paul Channon: When my right hon. Friend says "area by area", what does he mean? When the commission gets down to its job, will it look at a county at a time or, in some cases, units smaller than a county? How will the commission decide which areas to select for review?

Mr. Heseltine: My right hon. Friend raises an interesting question. We do not anticipate that the areas will be smaller than counties. Indeed, we expect that they will usually include several counties. Undoubtedly, there


are areas where local ambitions or requirements might indicate that cross-county boundary reorganisations are
appropriate. For example, in certain areas old counties disappeared. They might reappear and county boundaries might have an effect on the matter.
Part II of the Local Government Bill also contains enabling powers, subject to Parliament, for setting up a residuary body or bodies, or a staff commission or commissions. As the House will know, such bodies have been found helpful in previous reorganisations. But we intend to set them up only if the need for them is clear.
Part I of the Bill deals with competitive tendering. It is almost uncontested by local authorities—at least in private—that competitive tendering has powerfully changed local services for the better.

Mr. William O'Brien: What of quality of service?

Mr. Heseltine: If the Labour party intends to abolish competitive tendering, that is an additional interesting revelation about its policies. I am only too anxious to give way if anyone wishes to suggest that there will be no more competitive tendering. It is obvious that the winds of change have blown such socialist nostrums from Labour Members' minds. Competitive tendering is one more item on the long list of items that the Conservative party has implanted in the national culture of how to deliver services.

Mr. Allen McKay: Does the Secretary of State agree that there is a difference between competitive tendering and compulsory competitive tendering?

Mr. Heseltine: Yes, there is a difference. In the case of voluntary competitive tendering, Labour authorities do not do it. In that of compulsory competitive tendering, they do.
Research by the Institute of Local Government Studies has shown that work awarded through the competitive tendering procedures costs 6 per cent. less on average, and that in general standards are maintained or improved.

Mr. David Blunkett: Will the Secretary of State confirm that only 40 authorities were surveyed by the Institute of Local Government Studies? On page 132, paragraph 13.36, in its conclusion it says:
Confidence in the financial assessment of the impact of competition must be limited. Outturn figures for the post-tender period are not available. The changing accounting practices that have resulted from competition have made the provision of information and comparisons of cost before and after competition difficult.
In other words, it said that it did not really have the evidence, but it took a good stab at it.

Mr. Heseltine: If the hon. Gentleman is so sceptical about the benefits of competitive tendering, why does he not have the courage to pursue the logic of the argument and say that his party will get rid of it? He knows, as everyone knows, that competitive tendering, imposed where necessary by the Government, has shaken up service delivery standards in local government like nothing that we have seen in recent decades. That is why the Conservative party has the courage to say so, and intends to extend competitive tendering. We will obtain better value for money and higher quality services, despite the worst attempts of the Labour party to frustrate that aim.
The costs have materialised at 6 per cent. less on average and in general terms standards have been maintained or improved. But that is an average position. The truth of the matter is that there are many more extreme examples. No one in the House will forget the state of the city of Liverpool when its trade unions, encouraged by the Labour party, tried their customary strong-arm tactics against the Labour council of the time. We had the unedifying sight of pile upon pile of rubbish towering in the city centre streets. When the city went to tender, the in-house team bid £7.9 million. The private sector bid £3.9 million. The private sector cleaned up the city.
Liverpool was not the only dramatic example. When we used our powers to force Camden council to re-tender its street-cleaning and refuse services, it replaced an ineffective and costly in-house service with a private sector contract that swept the streets and saved the local taxpayer millions of pounds.
So the question remains whether those who oppose compulsory competitive tendering seriously believe that without that process those cost savings and management improvements would have taken place in many local authorities. There is a stunned silence from the Labour Benches because Labour Members know in truth that those improvements would not have taken place without compulsory tendering. The fact is that in the past too many authorities ran their services more for the convenience of their work forces than for the communities that they should have served.
Where authorities, on behalf of their chargepayers, wish to employ an in-house team for these services compulsory competitive tendering has forced them to demonstrate that their team can do the job as efficiently and effectively as an outside contractor. That discipline has meant that they have had to knuckle down and get on with the business of providing services for the citizen, and not jobs for the boys.
We now have to extend competition into local authority white-collar services.

Mr. John Maxton: Why?

Mr. Heseltine: Here we go again. The question is again asked immediately. The Labour party says that it will not prevent competitive tendering in respect of the services to which it now applies. I shall be very interested to hear whether the Opposition intend to prevent its extension and thus deprive people of the further enjoyment of improved services.
Last November we published a consultation paper entitled "Competing for Quality—Competition in the Provision of Local Services". That document proposes initially to extend CCT to a number of construction-related professional services, such as architecture and engineering, and then eventually to bring the stimulus of competition to a range of core corporate services, such as finance, legal services, personnal and administration. The consultation paper made it clear that we recognise that the existing CCT procedures under the Local Government Act 1988 may need revision for such services.
For the activities already covered by the 1988 Act local authorities decide on the quality of services that they want and then set specifications for the job. Once they have received tenders it is up to them to ensure, in a fair and objective fashion, that tenderers can meet their


specifications. But in the case of professional and technical services considerations of quality are more complex and more difficult to measure. It is for that reason that we are prepared to consider a modified tendering procedure with a separate quality threshold and double-envelope tendering. This would enable authorities to look at the prices tendered by those who come up to the standards that they and their local communities require and then to judge on the basis of price alone. It is our intention that this Bill will provide powers to modify the existing CCT procedures for the professional and technical services to take account of this and other concerns.
As it stands, clause 8 does not not do that. Instead, it purports to provide a wholly inflexible and unusable power which could not address the particular concerns relating to professional services. It would treat quality in architecture on the same level as quality in refuse collection. I give notice that, in Committee, we shall table amendments to restore the necessary flexibility to this power.

Mr. Dalyell: I wonder whether the Secretary of State can answer a question that bothers West Lothian district council. In the event of the authority's having misgivings as to the capability of the lowest tenderer to maintain a quality service, what remedies are available to it at the tender-evaluation stage? This is a matter that bothers serious people.

Mr. Heseltine: The hon. Gentleman is perfectly right, and I have just answered his question by my reference to the concept of double-envelope tendering, whereby quality thresholds are set and firms have to ensure that those are met. Above the quality thresholds, it is a question of price. The hon. Gentleman raises a perfectly legitimate question, but it is one that we have anticipated and answered.

Mr. Allen McKay: On the question of quality, it is well known that firms submit tenders even though architects would advise that those firms could not do the job. On paper the costing looks good, but practical experience is another matter. In such a case, would an authority, on the advice of its officers, be able to eliminate a tender?

Mr. Heseltine: The hon. Gentleman must be fully aware that invariably officers advise against competitive tendering techniques. They invariably produce a range—

Mr. Allen McKay: rose——

Mr. Heseltine: I have twice given way to the hon. Gentleman, and I want now to reply to his questions.
If we had not introduced the rigour of competitive tendering regimes, we should not have seen the dispersion of activity towards the private sector. Local government, if it had had the will, could have done these things on its own initiative. However, it took legislation to change the minds not only of local polititians but of local officials and, in particular, of the trade unions behind them.

Mr. Allen McKay: rose——

Mr. Heseltine: I have dealt with the issue, and I wish now to move to the third aspect of what I have to say.
Clauses 8 and 9 contain enabling provisions, and they will not affect local government activities until we bring

secondary legislation before Parliament. The consultation paper sets out a number of ways in which we intend to use these enabling powers if Parliament grants them. We shall carefully consider responses to the consultation paper and shall bring forward our proposals for secondary legislation in due course.
I should like now to come to a question that has been raised by Conservative Members—local authority performance standards. Everybody knows that service standards vary. We know about authorities in whose areas rents are not collected and repairs are not done. We know about the bins that are not emptied and about the streets that are not swept. We know that costs too vary. The whole House must know that, in general, costs under Labour authorities are higher than costs under Conservative authorities. It is still true that, on average in local government, a vote for Labour costs the individual payer £80 a year extra.
The citizens charter White Paper promised that electors would be given the information they need to enable them to judge the services provided by their local councils and the costs. Those electors should know that it costs 8.69p per head to collect the rubbish in Tory Wandsworth, and 23.28p—nearly three times as much—in Labour's Camden. They should know that it costs £10,000 per km to maintain the roads of Labour's Lancashire, but only half that in Tory Lincolnshire. We know that these variations exist. [Laughter.] I am not surprised that hon. Members find it funny that services in Labour-controlled areas should cost so much more.

Dame Elaine Kellett-Bowman: Is my right hon. Friend aware that when the Conservatives were in charge of the Lancashire county council the standard and maintenance of our roads were well above the national average but that they are now below the national average?

Mr. Heseltine: But not in cost. As we should expect, my hon. Friend makes a most eloquent point.
We all know that these variations exist, but the electors should not have to rely on stray admissions to find out what is going on. I refer, for instance, to the admission of Keva Coombes, the former leader of the Liverpool council. In July 1990 The Independent quoted him as having confessed:
The council's problems are not down to resources, rather inefficiency. It costs four times more to pick up a piece of litter in Liverpool than it does in other areas.
Some hon. Members—you, Madam Deputy Speaker, and I among them—will remember Maureen Colquhoun, an ex-Member of Parliament and an ex-councillor in Labour Hackney. She summed up the situation in Hackney in these words:
There was only one reason for Hackney council losing seats at the 1990 elections—the total failure of the Labour Group … to deliver services. The record is shameful.
She went on to make another observation—and this is a matter of which I have experience and in respect of which I know how she feels. She said:
Tenants were not treated as people at all.
These are the words of a former Labour Member of this House describing Labour in local authorities.
We do not think it good enough to rely on these accidental admissions, so clauses 1 to 4 provide the basis for systematic comparisons. Standards of service and costs should be reported on a common basis determined by an independent body. That is what the Bill provides, and the


Audit Commission is already preparing proposals that will allow the public to compare the cost in their area with the cost in other areas of services of similar standards.

Mr. Blunkett: The Secretary of State has made comparisons. Does he believe that all comparisons are fair? Would he say that it is fair to compare the costs for collecting a single tonne of rubbish? Will he confirm that in Wandsworth it costs £39.28 to collect a tonne of rubbish, in Westminster it costs £21.33, but in Haringey it costs £16.62 and in Newham £19.08? Will he confirm that in Chiltern, a Tory-controlled authority in Buckinghamshire, it costs three times as much to collect the rubbish as it does in Labour-controlled Milton Keynes, down the road? If there are to be comparisons, will they be across the board, so that we can see the kind of rubbish that the Secretary of State is talking?

Mr. Heseltine: As on so many other occasions, having listened to what I have had to say, the hon. Gentleman has come round to agreeing with me. We shall give him exactly what he wants—all the statistics for all the services for all the authorities. I am delighted to tell the hon. Gentleman that, because now he will come through the Aye Lobby in support of our Bill. We have another convert on the Labour party Benches.

Mr. Enright: Will the Secretary of State also look at the statistics on additionality in RECHAR areas?

Mr. Heseltine: The hon. Gentleman is as aware as I am that this matter is being carefully considered by the Government, and when we have something to say, we shall make a public statement. However, to the best of my knowledge, that policy is not covered by this Bill. If I am wrong, I should be grateful if the hon. Gentleman will correct me, because I have nothing about it in my briefing notes.

Mr. Bob Cryer: If it is not in the Secretary of State's briefing notes, he cannot say anything about it.

Mr. Heseltine: No. If it is not in my briefing notes, it is not there.

Mr. Christopher Gill: Before he leaves accountability, will my right hon. Friend agree that, whatever the proposed changes that are made, accountability will be achieved only if responsibility and authority are vested in the same pair of hands? Whatever he does in this review of local government, will he ensure that that principle is scrupulously adhered to?

Mr. Heseltine: My hon. Friend will have heard what I said earlier about the local government commission because it is with the intention of seeing the emergence of more unitary authorities that we are introducing the Bill. My hon. Friend will therefore be able to support us with enthusiasm.
The Audit Commission has issued a paper—"The Citizens Charter: Local Authority Performance Indicators", and I have arranged for copies of it to be placed in the Libraries of both Houses. The paper sets out the Audit Commission's preliminary thinking on how it would set about its new tasks. The paper is most important and one that the House will want to consider with great care. As I have said, all the figures will be published and

the resulting publicity will be a powerful motivator. Authorities will no longer be able to hide behind vague definitions of standards and vague assessments of costs.
Let me make two things clear. First, standards of performance are central to the provisions in clauses 1 to 4 and to the future development of the so-called league tables. There was some confusion about this matter in the other place. The Bill makes it clear that the subject matter of comparisons is to be standards of performance achieved, as is set out in clause 1(1) at the beginning of the Bill. The criteria of comparisons follow, and are cost, economy, efficiency and effectiveness.
Secondly, the requirement for the Audit Commission to give directions to local authorities requiring them to give the public information on their performance in no way detracts from the freedom of authorities to decide for themselves what standard of service to provide. The Bill is concerned about the reporting of levels of service delivered. This will enable the public to make their judgment on whether their authority is delivering good value for money.
Clauses 5 and 6 implement another aspect of the citizens charter. In too many cases, local authorities do not respond to their auditors' reports and recommendations. Clause 5 imposes on bodies a new duty to respond promptly, formally and in public to auditors' public interest reports made under section 15 of the 1982 Act.
There are doubts about the ability of the Audit Commission to publish information about individual authorities—in other words, to name names. Clause 7 will enable the Audit Commission to disclose information on which bodies fail to comply with the requirements of performance standards or contravene the accounts regulations—for example, by failing to publish their accounts on time—or are subject to an auditor's report. They could also disclose the contents of such a report and the body's response. I see no case for shielding authorities which do any of those things from the publicity that their performance should properly attract.
Both in the citizens charter provisions and in the proposals for structural reform, the Bill puts the interests of the people first. It will provide voters with the facts about the way that councils discharge their responsibilities. It will extend the benefits of competitive tendering and it will lead to a local government structure that takes account of the needs of each area and of the views of local citizens. I believe that it will lead to a significant advance in the quality of local government, and I commend it to the House.

Mr. Bryan Gould: Long-suffering local government has been an all-too-familiar battleground for the major parties over the past decade and that has been particularly true of local government finance and competence, where a vast gulf separates the two major parties and where we have differences of a profound nature not only about the practice of policy but about its objectives.
As we approached the Bill, it was possible to hope for some consensus. After all, who could disagree with some of the Government's stated aims, such as better-quality provision or the restructuring of local government so that it is simpler, more democratic and more efficient in its


operation? Labour yields to no one in its enthusiasm for those causes. We were there first with our quality street proposals and our proposals for a quality commission.
Labour local government has led the way in practical terms with proposals on how such changes should be implemented. We have been long-standing critics of the 1974 reorganisation. When I represented Southampton, Test I was a strong supporter of what we then described as organic change—a champion of the county boroughs, of their rights and of their capacity to run their own affairs.
Therefore, in principle, we should be able to look for consensus on the Bill, but I am sorry to say that it is simply not possible on the basis of the Bill. The Government have thrown away a chance because they take too narrow a view of how to achieve quality and of what quality means in local government services and because they have been unable to approach the issue of structure in anything other than a spirit of narrow, party advantage.
We have no difficulty in supporting the provisions in the first part of the Bill that require publication of information on the performance of local government. Indeed, we would go well beyond the Government in demanding the public setting of standards, the provision of information to citizens and the ability of citizens to monitor those standards and demand redress when they are not met.
The Government have been hopelessly narrow in their definition of what should be measured. True to form, they are concerned exclusively with cost. They do not concern themselves with the quality of provision. They are looking for an accountant's measure, which will always suggest that cheapest is best. We believe that, on the contrary, quality of provision does matter and that local communities should be able to decide for themselves what quality of service they want. That judgment will necessarily differ from one locality to another. The needs of one community will be very different from those of another.
The circumstances in which a service is to be delivered will vary enormously from one area to another. That factor alone means that the Government's proposals and their insistence on an across-the-board, national set of measures are deficient in terms of the definition of what is to be measured and in respect of how it is to be done. There is no provision in the Bill for local variation—unlike the Government's national health service charter, in which the importance of locally set standards taking account of local needs and circumstances is recognised. Nor is there any recognition of the complexity of the measurements that are to be attempted if fairness is to be achieved and like is to be measured with like. Even a simple task such as grass cutting, for example, cannot be measured unless we are clear about many variables, such as the length of the grass and frequency of cutting. That is—[Interruption.] It is easy to laugh, and I know that the point sounds a small one, but how is such a measure to be used and relied upon? If that is true of grass cutting, imagine the difficulty of measuring the quality of more complex services.

Mr. David Wilshire: The hon. Gentleman has said that the Government's approach is an accountant's approach. It seems that he and I were listening to a different speech. I thought that I heard my right hon. Friend the Secretary of State say that, even

where service arguments and cost arguments demand large areas, local people might want small areas. Was not my right hon. Friend saying that if people want small areas, that is what they should have? That is exactly the opposite of what the hon. Gentleman is saying.

Mr. Gould: The hon. Gentleman must be doing his best to confuse the House generally. He has intervened on an issue that does not arise at this stage in my speech. I shall gladly deal with restructuring later. Perhaps the hon. Gentleman will try to follow the argument a little more closely. If he does so, he will be able to judge more accurately when to advance his prepared arguments.
The Government should recognise the problems to which I have referred, at least to the extent of acknowledging that a good deal more work must yet be done on performance criteria by the Audit Commission—the report that it is publishing is most welcome—and by local government, so that there is at least an attempt to reach agreement between the commission and local government before local authorities are, in effect, put in the dock by the Government.
The Government's accusatory attitude remains the main thrust of part I. There is the suggestion that local government is inherently inefficient. If not, why is there the emphasis on cost? Why not measure rather more important matters and rate local councils in accordance with their success in delivering important services such as meals on wheels or nursery school places? If we are to measure, let us measure things that are important. I assure the Secretary of State that if that sort of measurement is undertaken the pecking order will be rather different from the one which he has suggested.
That is our main criticism of the citizens charter, on which the Bill, at least in part I, is based. Every page of the charter is redolent of the view that the only thing to be done with public service—especially local government service—is to privatise it or to import the so-called disciplines of the marketplace. The charter is a pathetically inadequate document which has come and gone virtually unnoticed. Even the Government have recognised that it has been a non-event, as is shown by the need to relaunch it later this week. Its impact so far has been zero, apart from its being said that the Prime Minister is pleased with the improved public recognition that he has enjoyed as a result of wearing his own name badge.
The charter is a document without any content. It is an attack on failures for which the Government are responsible. Those are failures of funding and of understanding local government. The charter's prescriptions miss the point and merely reflect the Government's prejudices.

Mr. Keith Mans: If the citizens charter has had no impact, how is it that the portion of it that is called the patients charter has had to be reprinted, and has so far sold nearly 1 million copies?

Mr. Gould: If my experience is anything to go by, I imagine that it has been reprinted many thousands or millions of times. The patients charter arrived through the mail at great cost to the taxpayer, no doubt. When I bothered to read it I found that it contained nothing of any value. Everything that it promised was contradicted by the experience of patients in the NHS.
If we really want improvements in service delivery, we should be looking to Labour's quality commission


proposals. Labour local government already has an impressive track record. It has pioneered customer contracts, customer care training and the provision of immediate redress if things go wrong. It is significant—I say this in response to all those ignoramuses on the Conservative Benches who laugh—that when the Government were drawing up the citizens charter they made a discreet approach to—guess who? The answer is the Labour party. They approached us to ask us whether we could send them a handful of the brochures that had been produced by Labour local authorities on customer care contracts, on customer care training and on the provision of redress. It was to those Labour authorities, such as York, Islington, Oxford, Norwich, Harlow and North Tyneside—I could go on because the list is long—that the Government turned for practical examples when they were drawing up a citizens charter.
This part of the Bill is a great disappointment. It is too narrow, too doctrinaire and too permeated with a lack of sympathy for local government. It is all too typical of the charter, of which it is, sadly, all too predictably a manifestation.
That is even more true of the next subject that is tackled by the Bill. The intention here—this was reiterated by the Secretary of State—was to extend the provision of compulsory competitive tendering to a range of professional services, despite the lack of any evidence that such an extension was either desirable or practicable. It might have been thought that before any such enterprise was undertaken it would be sensible to survey the effects of CCT so far. The Government have failed to do that. The studies undertaken have been partial and inconclusive. The only conclusion that can be drawn from the work undertaken by the Institute of Local Government Studies and the Chartered Institute of Public Finance and Accountancy is that small cost savings in service delivery of about 6 to 7 per cent. have been at the very least matched and offset by the costs of the tendering process. That is to say nothing of the costs that have not been measured, such as the costs of corners cut in service delivery and of the downward pressure on wages and working conditions, which are already shamefully low.
That is why we believe that the way forward is not through compulsion. A Labour Government will largely remove the element of compulsion, reserving it only for use when a local authority has shown over a period that it has failed to meet acceptable standards. We do not accept that there is any case for extending CCT purely on ideological grounds. The Government have not been able to show any evidence for doing so. They have refused to publish the PA report that they commissioned, presumably because they felt—as it turned out, quite rightly—that the report provided no support for their prejudices. They were duly embarrassed when the report was leaked. It showed that in respect of some of the services proposed for CCT—legal services, for example—costs were substantially higher in the private sector than in the public sector. It showed that no market exists for other services and that process costs would outweigh any cost advantages in yet further examples.
The Government, true to form, were undeterred. They pressed ahead, issuing a consultation document and specifying that consultation would end on 31 January, conveniently after the Bill had received a Second Reading in both Houses. So much for consultation.
The consultation paper was hardly free from mystery. The Prime Minister went out of his way last year to specify housing management as a prime candidate for the extension of CCT, yet it is not mentioned in the document. Perhaps the Minister of State will be able to resolve the mystery of whether housing management is in or out. I see the hon. Member for Harrow, West (Mr. Hughes) courteously waiting to intervene, but on the point of leaping to his feet. If he wishes to intervene, I shall gladly give way.

Mr. Robert G. Hughes: The hon. Gentleman is basing much of his case on the PA Consultants' report, yet his noble Friend Lord McIntosh described it as poorly written and inaccurate. The hon. Gentleman says that he believes every word of it. The Opposition cannot have it both ways.

Mr. Gould: My noble Friend Lord McIntosh is entitled to make his own judgment of the report's literary style; I am entitled to put the report's conclusions before the House. I have taken the trouble to spare the hon. Gentleman the pain of listening to the language used in the report, which I have paraphrased. However, I assure him that not only are the conclusions impeccable, but so are the language and the grammar.
Even the Government were forced to recognise in the debate in the other place that, if competition was applied to many services according to ordinary principles, it would be most unlikely that the private sector would get much of a look in. The Government accordingly proposed a quality threshold. The very phrase should send a shiver down the spine, in the light of the television franchise debacle. At the same time, they resolutely refused to recognise that any reference to quality was needed in the services already subject to CCT. If it is right for one group of services, why is it irrelevant to others? Who is to decide the quality threshold? Is it, as the Secretary of State implied, to be him? Is it, as one of his noble Friends conceded late in the debate on the Bill in the other place, to be for local authorities to set that threshold?
Not surprisingly, their Lordships objected to the whole farrago of nonsense and prejudice and they wrecked the Government's proposals, not least on the ground that the Henry VIII clause—part of clause 8—was a constitutional monstrosity. Unfortunately and sadly, as we heard from the Secretary of State, the Government intend to override their Lordships and to restore a provision that has no defenders outside the ranks of the Government's ideologues. We shall resist that restoration.
Part II of the Bill is an even greater disappointment and an even bigger missed opportunity. We have always made it clear that the 1974 reorganisation had failed and that what was needed was a simpler, more comprehensible, more accountable unitary structure for local government. The Secretary of State appeared to accept that, too, so we looked to common ground on that score.
We also supported the idea of a commission that would attempt to measure local needs and interests and come forward with flexible answers to suit local circumstances. We made it clear that if such a commission were properly set up, comprised a proper balance of people and interests, and had sensible terms of reference, an incoming Labour Government would be glad to pick up its work and to act on its conclusions. Those hopes have been dashed by the provisions of the Bill. I say nothing about the membership


of the commission, which presumably has not yet been decided, but the heart sinks at the prospect of the Secretary of State's yet again being unable to resist the chance to play party politics.
We are, however in a position to judge the terms of reference of the commission, and they fill us with alarm and despondency. Apparently, it will roam the countryside, guided only by the whim of the Secretary of State, proposing or not proposing—as the case may be—change which may or may not introduce unitary government in one part of the country rather than another. Its recommendations, again subject to whim, will be made and implemented piecemeal and over a long period. It is impossible to imagine a surer recipe for confusion than what the Secretary of State proposes. At any given time, some parts of the country will have unitary and others dual forms of local government. Some will be in the course of change, others threatened with change, yet others absolved from change, with others not knowing what to expect. No one with an ounce of understanding of local government could contemplate such chaos with equanimity.

Mr. Wilshire: I wish to take up the hon. Gentleman on his point about some authorities having unitary and others having dual forms of local government. I am against two-tier authorities, but if local people matter as much as the hon. Gentleman and my right hon. Friend the Secretary of State say they do, we should not rule out what local people want, even if he and I think that to be wrong. Is he againt local variation and against local people? Does he still want to dictate from the centre?

Mr. Gould: The hon. Gentleman must be a very late convert to that view.
It is remarkable that the Government so lack confidence in their espousal of unitary government that they dare not use that principle to frame the terms of reference of the commission. They are not only a sure recipe for confusion, but they entirely fail to deal with some of the fears about, for example, major environmental responsibilities such as the future of structure plans, whose importance Labour is committed to emphasise, and the role of specialist services such as the county archivists. The terms of reference exclude that potentially—indeed, actual—valuable element of local government, the local parish and community councils. They should feature prominently in any future reorganisation of local government.
Most surprising of all is the refusal to recognise the demand for a Londonwide administration for our capital city. The great majority of Londoners—this is shown by all opinion polls—know all too well the price that they pay for the absence of any Londonwide voice, and the handicap that our capital suffers in comparison with other major cities at home and abroad. Even Tory voices, ranging from the chairman of the Tory party—although somewhat muted, it is true—to Lady Porter, recognise that something has to be done. However, the Secretary of State and the Prime Minister, for once united, are frozen in indecision. They have decided that Londoners must make do without the benefit of a strategic body to plan the capital's future and that London must be excluded from the Bill. They will pay a price for that indecision and the next Labour Government will specifically remedy the omission.
The Bill is, in the end, the Secretary of State's Bill. It reflects his peculiarly partisan approach to all these issues. It is local government's misfortune that he brings to his task a perspective that is too narrow, too partisan and too lacking in understanding of what local government is about and the value of the contribution that it can and must make. Local government now needs a proper debate about its true role and function and an appreciation of the importance of decentralising power in a hopelessly over-centralised country. From that debate should flow conclusions about the best structure for local government. Function should determine structure, not the other way round.
The structure should be decided in the long-term interests of local government and the communities that it serves. It should not be influenced by short-term and partisan considerations about where party advantage might lie. It should not be driven by a passion for centralisation and a determination to strip local government of its remaining functions and independence. Yet the Secretary of State's personal style and his record in local government inevitably lead to the conclusion that that is precisely what he is about. We do not trust him and neither does local government. That is why the twin objectives of the Bill—quality services and a democratic and efficient structure for local government—must wait for their achievement until the election of a Labour Government.

Mr. Paul Channon: Parts of the speech of the hon. Member for Dagenham (Mr. Gould) were astonishing, especially his latter remarks and his attack on part II of the Bill. If we do not proceed in the way outlined by my right hon. Friend the Secretary of State, we shall be condemned to many years of uncertainty before any change is made in the structure of local government. My understanding of what the hon. Gentleman was saying was that there should be a long debate and then a future Labour Government—should there be such an animal—would put forward proposals, which would then be subject to major legislation. The hon. Gentleman is putting off the day of reform for many, many years. That may be the wish of some members of the Labour party, but it is not the view reflected in the other place. It certainly does not reflect the views of many Labour party supporters. Indeed, in my constituency, Labour party members are among the most enthusiastic supporters of part II. The hon. Gentleman made a misguided attack on the Bill.
I welcome both parts of the Bill, and congratulate my right hon. Friend the Secretary of State on the further moves towards competitive tendering and contracting out. My local authority, Southend, was one of the first to contract out its refuse collection services—a move that has been outstandingly successful, and is now entirely non-controversial. A much better and more economical service is now provided. That is only one example of what local authorities can achieve—and, indeed, are increasingly achieving throughout the country.
Part II, which deals with the structure of local government, is the most crucial section. Whatever the rights and wrongs of the reforms of the early 1970s, no one


can claim today that they have met with popular support. They have proved unpopular in many areas where services could previously be provided much closer to hand.

Dame Elaine Kellett-Bowman: And more cheaply.

Mr. Channon: In many cases, yes.
I represent part of what used to be one of the old county boroughs. It seems to me, in retrospect, that that was an excellent arrangement. It allowed decisions to be made at a "responsive" level: it enabled people to feel that they had some control over their local authorities. When the education committee met, for example, everyone knew every school that was up for discussion. Everyone knew which school needed more money. The old system provided more accountability as well as less remoteness, and I suspect that people in virtually all the old county borough areas regret the changes that were made. My constituents certainly do. But I make no criticism of the county council that took over my borough. Despite the inevitable remoteness that has followed the change, that council has proved both effective and economical.
If we are to change the structure of local government—a proposal that has, I believe, been widely welcomed—what should be our aim? Clearly—as my right hon. Friend explained—it should be to provide high standards of public service at a reasonable cost to the citizen, and to respond to the wishes of local people. If the word "subsidiarity", as used by Mr. Delors, has any meaning, it surely applies to local government: decisions should be made as near to the people as is conceivably possible.
I am sure that I am right in expecting my right hon. Friend to ensure that the new local government commission is open to new ideas. After all, he has said in his consultation document that he wants an enabling authority. That, I think, is the direction in which local government will move in the next few years. More services will be provided outside the traditional field of local government. When all schools have their own local management, the structure of local government will be affected; when a vast number of schools become grant maintained—as I confidently expect them to do—the impact will be enormous. If, as I expect, there is a dramatic increase in the number of applications, local authorities will have a smaller role to play.
If we look ahead to a time several decades from now—as we should at least try to do—we should ask how we want services to be administered. I do not see why a national blueprint should be laid down; administration may well be different in different parts of the country. Both my right hon. Friend and the hon. Member for Dagenham mentioned housing. The increase in the role of housing associations—as even greater increase than the one that
we are seeing now—will mean a smaller role for local authorities, and a greater role for individuals. I have already mentioned some aspects of contracting out.
We do not want local government for local government's sake. We want to provide the best possible standard of service, and I believe that that can be done differently in different parts of the country. Whatever unit of local government finally emerges will, I think, be able to delegate downwards if it wishes, conferring on local communities many of the functions that local authorities now perform.
I am convinced that, in most instances, unitary authorities provide the best solution; but I do not see why

the hon. Member for Dagenham should attack my right hon. Friend for enabling parts of the country that may wish to retain two-tier authorities to do so. I know that some of my hon. Friends feel strongly that the dual system is better for their areas. If that is so, good luck to them: why should we try to lay down the unitary system as a general principle? The point of part II, surely, is to give the citizen more say in deciding what form of local government should operate in his area. Most, I believe, will choose the unitary system, but if some do not want that, let them get on with it.

Mr. Martlew: Is the right hon. Gentleman suggesting that, when the proposals are ready, they should be put to a referendum so that people can choose the form of local government that they want?

Mr. Channon: I doubt that that will be necessary in most areas; but it is essential—and, indeed, it is clearly laid down in the consultation document—that the decision that is finally reached should be reached by the vast majority of local people. People in my part of the country would be in no doubt about what they wanted. [Interruption.] I have seldom been more convinced that I am right than in this instance. I am not opposed to the idea of a referendum if that is what people want, but I think that in most cases it would be unnecessary. Of course, if the hon. Gentleman's point is that the decision must be welcomed by the majority, he is entirely right. The White Paper provides for a presumption in favour of unitary authorities unless clear reason is given for different arrangements to be adopted.
I should like to know more about the local government commission. How will it carry out its enormous task? Who, for example, will set its programme of work? Will the commission decide how to proceed, or will my right hon. Friend say, "Tackle Avon now, Cornwall next and Essex after that"? That question has prompted a good deal of interest.
In another place, the Minister of State implied that a history of dissatisfaction with the existing structure would be a factor. I hope that that is true; if so, I concede the prime claims of Avon and Humberside. None the less, I wish to draw to the Government's attention the need to deal soon with the problems of Essex, and particularly those of Southend. As in many other ex-county boroughs, there exists in my area a community of interests—as laid out in the consultation paper—and a strong desire not to change the boundaries that existed under the old system, or to become predatory.
I hope that the areas in which dissatisfaction is known to exist will be among the first to be dealt with. I also hope that my right hon. Friend will be able to tell us a little about timing. When will this great process be finished? It is a long and arduous business, and we shall all be kept in uncertainty for quite some time unless rapid progress can be made in areas where agreement is likely.
Will the commissioners split up into different groups, or will all, or only one, carry out each review? Timing, about which there is so much uncertainty, is not only important to the local population; it is crucial to local authority employees. Is the commission big enough? Will there be enough people to do the work in a reasonable period?
My right hon. Friend mentioned costs. I am disturbed by the figures that have been revealed in this week's Local Government Chronicle about the costs that local


authorities incur in defending their position. We do not want ridiculously expensive solutions to be adopted at the expense of charge payers—and, later, ratepayers—whose money might be squandered on unnecessary reports. I welcome my right hon. Friend's condemnation of such practices, and hope that he will say more.
The hon. Member for Carlisle (Mr. Martlew) challenged me on the need for a local referendum. I agree with him strongly that we need to consult the people before a decision is reached. Could we have some guidance about that from my right hon. Friend the Secretary of State for the Environment?

Mr. Enright: Will the right hon. Gentleman give way?

Mr. Channon: No. I have already given way on that point. All I am saying is that there must be adequate consultation so that we ensure that the community that becomes a local authority agrees with the decision.
I welcome the Bill. I suspect that most people welcome it. I am surprised that the Opposition intend to vote against it, just like that. Although I disagree with it, I understand their opposition to part I. However, to vote against reforming local government in this quick and efficient way strikes me as very surprising. The only consolation is that it will be extremely popular. That will encourage us in the weeks and months that lie ahead. I hope that the Bill will soon become law and that before too much time has elapsed these welcome changes will be in place.

Mr. Gordon Oakes: I intend to speak about part II. I assure the Secretary of State for the Environment that we are opposed not to the principle of revision of local government but to the ridiculous way in which the Government are attempting to do it. The Opposition will therefore vote against part II, just as we shall vote against part I. Before I deal with part II, may I say how much I agree with what my hon. Friend the Member for Dagenham (Mr. Gould) said about part I, particularly in his closing remarks.
What the Conservatives do in general and what the Secretary of State for the Environment does in particular is to build up an image of Labour local authorities. That may apply in a few cases, but it does not apply to the vast majority of Labour local authorities, including my own. The Secretary of State extends that image beyond Labour local authorities; it embraces local government in general, including Conservative local authorities. Unfortunately, we do not now benefit from many Members of Parliament, particularly Conservative Members of Parliament, having served their apprenticeships, before coming here, as local government members. Many Members of Parliament used to serve on local, district and county councils—even on parish councils. They knew what they were talking about.
It is nonsense for the Conservative Government to say that they introduced competitive tendering during the last 10 years. There has been competitive tendering in local authorities for generations. What the Conservatives introduced was a narrow basis of compulsory tendering. What the Conservative party has done generally and what the Secretary of State has done today in particular is to build up an image and then to attack it.
I prefer what my hon. Friend the Member for Dagenham said about the Bill. It is a last vindictive attempt by a dying Government to take a swipe at local government, local democracy and locally-elected people—devoted men and women, of all parties and of none, who are trying to do a good job. They were elected on the same franchise as Members of Parliament. We are here to do a job. They are there to do a job. They try to do that job to the best of their ability. They face the electoral consequences if they do not do so. They should not be put upon by a Secretary of State who wants to be able to tell them how they should do their job. That has been a characteristic of every Act of Parliament relating to local government that has reached the statute book since 1979.
The Bill expands the categories to which part I applies. It embraces the legal system, architects, library services, archivists and archaeologists. All these tasks are now performed by local government on a very cost-efficient basis. The Opposition object to the fact that these services are being driven, by dogma, into the private sector, regardless of the quality of the service provided.

Mr. Wilshire: The hon. Gentleman makes the point that competitive tendering implies dogma, but does he not agree that to say, as he appears to say, that local government is the only and the best way to provide these services is also dogma?

Mr. Oakes: If it is dogma, it is the dogma of democracy. It is the dogma of believing that those who are elected to do a job do it. It is ridiculous for the Government to proceed in this way. It will affect quality. Moreover, the widest possible powers will be given to the Secretary of State. He will be able to decide, on whim, what services shall be privatised and what services shall not be privatised. What is even worse, he will be able to decide, on whim, that services shall be privatised in one part of the country but not in another. Local government will not have the slightest idea of what he intends to do under part I.
Compulsory competitive tendering will apply to the most minute services. I wonder how the Department of the Environment will police it. For instance, a row is going on in my constituency between the admittedly Labour-controlled but very efficient Halton borough council and the Department of the Environment. The Department served a section 12 notice under the 1988 Act regarding the refuse collection service. I am still waiting to hear from the Secretary of State about the matter.
The one service about which I have never received a single complaint, either in my surgery or by letter, is the refuse collection service in Halton. The Department of the Environment issued a notice saying that Halton had not fairly operated its refuse collection service under the 1988 Act. It transpires that the saving involved is about £9,000. That is the difference between the provision of the existing service and the next highest tender. The Department of the Environment notice included the words
It has come to our notice".
There had not, apparently, been a complaint from any of the other tenderers. Who brought it to the Department's notice? Does it carry out spot checks on what local authorities are doing? Even if it carries out spot checks on big services, such as refuse collection, I do not know how the Department could carry out spot checks on small services such as the archaeological unit.
The Secretary of State inhabits the building that I once inhabited as a junior Minister. When I reached the Department of the Environment my first impression was that it must look exactly like the headquarters of the former KGB in Russia. It looks that sort of place. The Department seems to be behaving in a similar manner. How many staff are involved in checking local authority tenders when the difference involves a mere £9,000? That is and must be dogma.

Mr. John Battle: Even in the commercial sector, if a tender is 3 per cent. lower than the in-house bid, is it not usual for that tender not to be accepted because the margin is thought not to be large enough for it to result in real value for money and efficiency?

Mr. Oakes: I cannot give the exact figure, but the figure would be far less than 1 per cent.
I turn now to part II which deals with the dramatic restructuring that will be entailed. I have to declare to the House not a financial interest but the fact that I am the honorary vice president of the Association of County Councils and that I have held that post for many years. [HON. MEMBERS: "Oh!"] It is an honorary position, but I declare it so that the House knows exactly where I stand on the matter. No money is involved. In fact, the position costs me money.
I remind the Government that our county council structure is the oldest, the biggest and, I would argue, the most cost-effective tier of local government, yet it has few friends in Government, or on the Conservative Benches. I regret to say that it has even fewer friends on this side of the House.
The ancient structure of county council government should not be abolished or castrated to the extent that it exists in name only. I argue that because of its age, antiquity and long-standing nature. I am proud to have been born in Lancashire. Other hon. Members are equally proud to have been born in Yorkshire. In fact, people who were born in Kent, Durham, Cornwall, Cumbria or Cheshire are proud to have been born in those counties.

Mr. Michael Brown: The hon. Gentleman's point will attract some traditional local support. My constituents thought that they were born and lived in Lincolnshire, hut since 1974 they have lived in a place with which they have no sympathy—Humberside. They want the commission to get rid of Humberside and to return to the old county structures.

Mr. Oakes: I understand the hon. Gentleman's point. I served on the Committee that bitterly opposed the ideas of the then Conservative Government, yet no notice was taken of his constituents' concerns. I would not object to the old east riding and Lincolnshire again becoming two separate counties because their marriage has been unnatural and uneasy.
At the end of the loyal toast, even in London, where I should not do so, I still toast the duke of Lancaster. Overseas visitors look at me strangely because they think that I am muttering a Jacobite treachery. But someone across the room will be saying the same thing. We look at each other and ask, "Where are you from?" I am sure that such territorial bonds exist in all areas—and rightly so.
Under the 1972 Bill, the part of Lancashire where I was born was transferred to Cheshire. I owe an allegiance, dedication and devotion to my new county of Cheshire,

but that would not be true if it had been removed into some region. Unless the Government are strict in the guidelines that they issue, such problems may arise under part II of the Bill.
I fear and distrust the joint arrangements that can be made under the Bill. I know that the Secretary of State has advised the commission to be careful about joint arrangements, but the Government's draft guidance makes it clear that if unitary authorities are to be based on existing districts, joint arrangements will be needed in many counties for existing services such as police, magistrates courts, probation, fire, emergency planning, probably for strategic planning and for education and social services.

Mr. David Bellotti: No.

Mr. Oakes: The hon. Gentleman says "No", but what does "joint committees" mean? It would mean not unitary local government with authorities being individually responsible for services but an expensive, bureaucratic hotchpotch of unselected bodies and committees unaccountable and unintelligible to the public, unable to switch resources between each other and arguing endlessly about crucial decisions.

Mr. Tony Banks: My right hon. Friend is warning the House about the situation that has arisen in London following the abolition of the Greater London council. Londoners do not know whom they can hold to account for lousy services. That is the point: the Bill removes democratic accountability.

Mr. Oakes: My hon. Friend is absolutely right. Although the Government say that this should be the exception rather than the rule, as the great Nye Bevan used to say, "Why look into the crystal ball when you can read the book?" The Greater London council and the other metropolitan councils show what will happen. More than 60 per cent. of metropolitan counties became three joint boards for police, fire and civil defence and transport. It would be worse if that were to happen to existing shire counties, because education and social services would have to be added to that list. Unless the Government are careful in their guidelines, I foresee such danger from the creation of joint boards.
Another example of what happens when a metropolitan council breaks down occurred in my constituency just before Christmas. There was a major chemical breakdown in Halewood, which is in the metropolitan borough of Knowsley. Unusually, the wind was blowing from the east, so the spill out blew towards the constituencies of my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and of the hon. Member for Liverpool, Mossley Hill (Mr. Alton). Had the wind blown from the west—as it does usually—it would have gone over my villages of Hale and Halewood, over the river to western point and perhaps even further afield. Neither Halton council nor Cheshire council was notified under the emergency procedures. Hospitals and ambulances were not alerted. As my hon. Friend the Member for Newham, North-West (Mr. Banks) said, that is the purpose of joint boards. The hon. Member for Mossley Hill is rightly pursuing the incident on behalf of his constituents, but he cannot discover who is responsible. That will happen again unless it is carefully dealt with in the Bill.
County councils are pretty cost-effective bodies. There are about 28,000 employees per county council, yet only six out of 100 are in central administration. No other tier of local government can make such a claim. No county council invested in BCCI; county councils are prudent bodies. Europe is now used to dealing with county councils, but I cannot see it dealing with joint boards. Such a concept is unknown to Europeans.
I plead with the Government to instruct the commission carefully to consider the ancient tier of county government. If it did not exist, I am sure that it would be necessary to invent it. If it is abolished, another local government review will quickly reinstate it.

Sir Anthony Durant: I am pleased to speak in the debate. I have great regard for the right hon. Member for Halton (Mr. Oakes) and his knowledge of local government, but I think that as vice president of the Association of County Councils he has received its brief and decided to speak on its behalf. That is not the purpose of the debate. We should consider the Bill impartially, but I understand his strong feelings.
The right hon. Gentleman said that he had never received any complaints about refuse collection. When I am in London, I live in Lambeth. I am on the board of directors of my block of flats—an unpaid job—which asked me to contact Lambeth borough council about the street refuse. I wrote to its chief executive. I said that perhaps it had become too difficult and that the council had decided not to collect refuse any more, because the streets are filthy and the collection service is appalling. One cannot say that there are no problems with refuse anywhere. Of course, standards vary and they may be good in Halton—they are not that bad in Reading—but the services should be put out to contract wherever possible.

Mrs. Maria Fyfe: The hon. Gentleman might be interested to know that I also live in Lambeth, in a block of flats inhabited by many other hon. Members, including some Tories. I also belong to the management committee which consists of residents. We have never had any problems with refuse collection in my block of flats, so it is highly misleading, to say the least, to suggest that Lambeth in general has massive problems. The experience described by the hon. Gentleman is not so widespread.

Sir Anthony Durant: I shall invite the hon. Lady for a cup of tea and to look around my block of flats. I shall then look around hers and we can settle the argument in that way.

Mr. Robert G. Hughes: I live in the same block of flats as the hon. Member for Glasgow, Maryhill (Mrs. Fyfe). It is interesting that she talks about rubbish collection but forgets the street cleaning, which is disgraceful. The streets are absolutely filthy—and that is Lambeth's direct services.

Sir Anthony Durant: I must get back to my speech because we seem to have begun a dialogue about Lambeth's streets and refuse. However, they provide a good example of the necessity to contract out.
I am delighted with part I of the Bill and what are called performance checks which are essential. The electorate knows too little about how their services are managed and whether they are cost-effective. The more that can be revealed the better. Were it not for their lack of knowledge, people would express views about what is going on.
My local council spends wildly. I must not mention the subject of bollards. The last time I did so, I swore in the House and Mr. Speaker—rightly—rebuked me. He said that it had gone too far even for Reading. The mayor had to write to Mr. Speaker saying that Reading was not so bad. Nevertheless, Reading council has spent vast sums on bollards costing £100 each and they have been put everywhere. The council has spent all the reserves that the Tories had before it took control. It has not collected the rents and is far behind in collecting the community charge. It is a Labour council. We need the Audit Commission to check what each local authority does, and that is why I welcome part I of the Bill.
Competitive tendering is essential. I said that refuse collection was not too bad in Reading, and the reason is that it has been put out to competitive tender. The dustmen made a bid and reduced their costs by about 50 per cent., so they cannot have been running the service very efficiently. Clearly, competitive tendering works and we must do more to encourage it.
I wish to spend most of my time on part II of the Bill, which deals with the necessary setting up of the local government commission. The electorate is confused about who does what. When one knocks on doors, one finds that people do not know what Berkshire county council does as opposed to what Reading does. That is understandable. It is not the electorate's fault that it does not know who does what. That is one of the weaknesses of a two-tier system. It is essential to create unitary authorities, and that is the right way to proceed. I look forward to its happening.
I regret the loss of the county boroughs. It was a good system of local government. Reading was a county borough—

Mr. Enright: Does the hon. Gentleman accept that one of the principal reasons why the Conservative Government reformed local government in 1972 was the inefficiencies of the county boroughs? It was the county boroughs which were destroyed by the Tory legislation in 1972.

Sir Anthony Durant: I was not here, so I cannot answer the hon. Gentleman's question, but I know about the county borough system in Reading. I can speak only as I find locally and. as I said, the system worked extremely well and was popular there. I do not necessarily agree with the hon. Gentleman, but I accept that he has his own view.
There is a fear, especially among those representing county councils, about education. I was a district councillor on Woking urban district council, as it was then. We were an excepted district under the education system and we managed 26 schools, and did so, I believe, reasonably competently. We appointed the heads and the rest of the staff and we considered their budgeting. I think that we ran a good system. Therefore, I do not think that there is any handicap in setting up a unitary authority at the lowest level which could also run education. We have now increased local management of schools and many schools are opting out, so why should not we let the local


district run education at a unitary level? There is nothing wrong with smaller units. That is one of the arguments that the counties use with which I do not necessarily agree.
On the local government commission, I agree that we should not merely draw a lot of lines on a map, which is what happened the last time. I was on the receiving end of that reorganisation as I was on the district council and was chairman of the committee which was supposed to carry out the reorganisation. It was a confused period. I do not foster the previous idea of drawing lines on a map and putting chunks here and there. It must grow like Topsy—the commission must consider the issues in their broadest sense and must make recommendations.
However, we must urgently consider our historic cities. They are part of our national heritage and it was perhaps a mistake to take local government responsibility away from them. They have civic traditions, community interests and civic pride and a unitary state that could be well run. As hon. Members may know, such historic cities are waging a campaign, and I should like to foster that idea. Their philosophy is right—they are trying to re-establish themselves. They demand that we proceed with that idea before some others, but that is a matter for discussion.
The Secretary of State is on record as saying that size should not be the be-all and end-all; it should be possible to have small and large units. As has been stated, we can buy in the services. We must consider the issues more broadly. We must consider the region as a whole to determine how things fit in and take account of local demand, of what local people want. They want to be associated with the area that governs them. If they are citizens of Reading, they want to be part of Reading and to know that Reading town rules them. Whether Reading is good, bad or indifferent is not the point. They want to feel that it is their town and they want to be governed by it, not necessarily by a county.
As several hon. Members, including my right hon. Friend the Member for Southend, West (Mr. Channon), have said, uncertainty will be a problem. There will be uncertainty, so we must get on with the job as fast as possible. In cases where everyone agrees on a tidy change, there is no harm in getting on. I do not agree with the Opposition that it will be chaotic if one thing is done and one thing is not. There is no problem with that. Why should not it be done one piece at a time?
There is no doubt that each level will fight for its existence. I agree with the Secretary of State, who condemned the expenditure of counties and districts in fighting their corner. That is a complete waste of money. The commission will be independent and will make its own judgment. It will not be influenced by a public relations company producing a smart glossy brochure. That must be stopped as a matter of urgency. My advice is, "Let's get on with it."
I strongly support the Bill and want to see implemented the changes that it proposes so that we can get people closer to the local government that they want.

Mr. David Bellotti: After almost 13 years in government and after the horrors of the 1974 reorganisation which most of us can remember, it is right

that the Government should now introduce these proposals. I warmly welcome them, especially those in part II of the Bill.
I hope that the Government will seek cross-party consensus in favour of people in local communities. If the Government take that as their trust, it will gather momentum and the reforms could work. We all know that in 1974 the reforms did not work.
My party's contribution on this occasion is set against the background of its either being in control or sharing control of about one quarter of local authorities. After six years on a town council, 12 years on a district council and 11 years on a county council, I feel that my 15 years' service—29 years' service in all—may put me in the unique position of not taking sides, but of being able to see the way forward constructively.
Although welcome, the local government changes must above all be seen to be fair across the country. The Secretary of State proposes that the local government commission should go to certain areas first and that those areas should gather some confidence and momentum, which is not only sensible, but will be welcome. When the Secretary of State appoints the other members of the local government commission, it would be wise for him to consider some cross-party recognition of the role of the parties in local government and the role of people outside politics who could bring their expertise to bear. In that way, some confidence could exist even before the commission arrives in a particular area.
It was also wise for the commission to be called a "local government commission" and for the Government to abolish the Boundary Commission at the beginning. The only clear point from the 1974 organisation was that it was false, as the hon. Member for Reading, West (Sir A. Durant) suggested, to begin with the idea of having a map and drawing boundaries. Nothing could be more preposterous. We should look at the local community, decide on the services that need to be delivered and then find areas that will enable those services to be delivered properly and responsively.
Part II also refers to the Audit Commission and to the need for "economy, efficiency and effectiveness". I hope that we shall also identify as a separate aim the point that we should be concerned about the delivery of quality in local services. It is all very well to consider the price, but it is even more important to discover what the quality of a given service is in a particular area.
The point made by the Secretary of State about comparisons of one authority with another were not helpful. We must study each local authority and decide what the challenges are for the councillors, of whichever party, in delivering a particular service in their authority. In one area, there may be many children who have English as a second language, so clearly the cost of delivering education there will be far greater than the cost of delivering education in another authority where there are few pupils who have English as a second language. If that factor is not taken into account and if we take into account only global spending allied to the number of schoolchildren in a local authority, we could come to some very false conclusions.
The same point applies to the collection of refuse, to which other hon. Members have referred. In my 12 years on Lewes district council, I received massive correspondence and many complaints about local services, but not once did I receive a complaint about local refuse services.


Other hon. Members have said that they did not receive complaints about local refuse services while they served in local government. In other areas, hon. Members will have received a massive number of complaints. The only conclusion to be drawn is that each local authority will be different and that we must examine the nature of each one before making comparisons.

Mr. Wilshire: I, too, spent 11 years on a district council and I also had almost no complaints about the quality of the refuse service. Does the hon. Gentleman agree that it is not only cost but quality that matters, even if there are no complaints? Surely he understands that there can be a huge waste of money which the public do not easily see and so do not complain about. My own local authority never had complaints about quality, but when tendering was introduced, massive savings were introduced although the quality stayed marvellously high.

Mr. Bellotti: The hon. Gentleman makes a reasonable point, although it is not sufficiently all-embracing. There is a question of cost and a question of quality. The two factors put together produce the service that local people deserve. In the local authorities on which I served, we were extremely mindful of the cost of delivering the services, but not to the exclusion of the quality of service delivered. Anyone can deliver a service of sorts very cheaply, but to deliver a service of the necessary quality is an extra challenge to the hon. Gentleman's point.
As we look towards the implementation of the proposals, it is important for us to bear in mind the question of timing. I and my party were concerned that the first information on the local government commission seemed to suggest that the implementation could take a long time. I encourage the Secretary of State to consider the point that a shorter period for implementation would be desirable, because the implementation period may otherwise lead to considerable difficulties. Senior staff in local authorities will see new posts being advertised in other authorities and may, quite properly, apply for them, leaving some local authorities in a void because they do not know whether their life will be continued. A shorter period should be the aim of the Secretary of State.
Another question is the continuity of services during the transition period. It is important that local authorities do not pass responsibility to new authorities which then do not take on those services with the continuity that is needed. The right hon. Member for Halton (Mr. Oakes) mentioned joint authorities. I assume that the Secretary of State was by and large saying in the Bill that such authorities would be the exception rather than the rule. It would be helpful if the Secretary of State could confirm that tonight, because there is a great fear about joint authorities. There is no real problem about police authorities, which have been mentioned, because there are many joint authorities for the police already.
There is no need for joint authorities for service delivery in education and in social services. They are not necessary and it would be helpful if the Secretary of State would confirm that they will not be the normal mode of delivery for education and social services. They could be undemocratic and unaccountable, and they could become very bureaucratic.
If a county council finds that it is to be abolished, what will happen to structure planning? That is probably the only function of the existing county councils which deserves some more detailed thought and we may have an opportunity to explore that point in Committee. The Secretary of State has an opportunity between now and then to consider whether structure planning might be an ideal function of a regional tier of government. Structure planning, involving ports, airports, motorways, the countryside, areas of outstanding natural beauty and especially our national parks, would be important if dealt with at regional level. If we had regional government, the case for a government for London should be made at that time.
As a former chair of education in East Sussex—the hon. Member for Reading, West referred to education—I know that it is alarming for a councillor to have to consider visiting 240 primary schools, 39 secondary schools and six colleges. I find it hard to believe that any councillor could keep in touch with such a large section of service delivery. During my time of service, I visited about one quarter of those establishments and the knowledge that I gained was useful but certainly not sufficient for me to oversee such a responsibility.
The right hon. Member for Halton, referring to a brief from the Association of County Councils, spoke of the need to have joint committees if education authorities were smaller. That seems unnecessary and inappropriate. I should have thought that a population base of about 60,000 plus was more than enough for a tier education authority, because the main point is to have a post-16 option in each area. The Government's proposals for colleges—some of which we welcome—make it less likely that a tier of 60,000 could not work. I am sure that it could. The Secretary of State should make it fairly clear that that could be an option if the local government commission arrived at that conclusion and if it was supported by local people. That would do a great deal to reassure people that they would not be put into very large structures.
The Association of District Councils, under the former chairman, Mr. Thomason, and the Association of County Councils, presently chaired by Mr. John Chatfield, have not been extremely helpful to our debates as they have obviously lobbied from vested interests. Having served on both district and county councils, I understand their thinking, but I call on both those associations to put their vested interests to one side during this process. We want to achieve the best structure that we can. I have no doubt that in East Sussex, for which I speak, people living in Brighton, Eastbourne and Hastings would love the opportunity to put forward proposals for unitary authorities for those districts. I have confidence that they would succeed in doing so if permitted.
I invite the Secretary of State to come to East Sussex in the near future; I am sure that both he and representatives of the local government commission would receive a warm welcome. I also ask the Secretary of State to consider inviting representatives of the local government commission to go to the Isle of Wight soon. I understand that all the political parties and virtually everyone on the Isle of Wight would like one tier of local government on the island. There is currently one county council and two district councils, so the island would make an ideal starting point for the local government commission, which would receive great support.
The Secretary of State said that he—I am paraphrasing—deprecated organisations that spend substantial amounts of charge payers' money on public relations campaigns to preserve themselves. I was pleased to hear that and am sure that he will join me in condemning East Sussex county council for unnecessarily spending £6,000 to join a consortium of county councils in the south-east of England with the sole aim of putting forward proposals to keep the county councils of Kent, Surrey, East Sussex, West Sussex, Hampshire and others. Oddly enough, the consortium did not invite the Isle of Wight to join it—the only county council in that region not controlled by the Conservatives. That gross misuse of charge payers' money deserves investigation and I hope that the Secretary of State will consider commissioning one.
I also hope that the Secretary of State will join me in confirming to communities across England that he has no intention of forcing anyone into a local identity in the form of local government if they do not want it. Clearly, we must decide how to proceed if communities cannot agree, but the present structure of boroughs and districts forms a possible way forward.
If a district or borough wishes to join with another, the proposals must include that as an option. It is an essential principle—one in which I hope the Secretary of State believes—that if parts of districts and boroughs wish to stay as they are, they should not be moved against their will. I have previously raised that matter with the Secretary of State. Although I believe firmly in that principle, it is of no help to me in my constituency when the local Conservative party distributes newsletters claiming that I believe the exact opposite. I now have an opportunity to place on record yet again that I do not believe that parishes and communities should be placed within structures of local government against their will. I believe that the Secretary of State shares my view and confirmation on that would be extremely helpful.

Mr. Martlew: Is the hon. Gentleman advocating local referendums to decide the boundaries of boroughs?

Mr. Bellotti: In the small number of cases where there is a clear division of opinion, a local referendum would be extremely helpful as it would be one way to make absolutely sure that the community backed the proposals. I support the idea of local referendums where appropriate. Where the bulk of the local community agrees on what they would like—I believe that there is consensus in Reading, Southend, Bristol, Brighton and Eastbourne—progress could be made without the need for referendums.
The plans to change the structure of local government desperately need all-party consensus if they are to be implemented. I hope that my comments will encourage the Government, because the future of the services that local people so rightly need and desperately want are far too important for us to play party politics with them.
Part I of the Bill refers to the citizens charter. I think that everyone will support—Labour party spokesmen have already done so today—the publication of information on the performance of local authorities. I hope that when we publish league tables and information we shall ensure that true comparisons are made. I also hope that we shall develop that proposal and give people meaningful information. Most of the work that the Audit Commission has produced is really only intelligible to those who understand local government. Many people will

not necessarily understand many of the Audit Commission's reports and much of the information sent to local government. In Committee the Government might address the issue of how to communicate to local people the level of services delivered, which is much more important than the cost, and whether the services are working.
I welcome the emphasis that the Government place on parish councils. If there were unitary authorities across England, with active parish and community councils, that would be almost ideal. Active parish councils at grassroots level could bring forward proposals and run some of the services. I do not see why they should not be in charge of some of the leisure and recreational services as well as the village halls and community centres that so many of them have pump primed and some of them run. That proposal would also provide a much more active understanding of how a unitary tier would work.
It is important that we encourage competitive tendering in local government, but if we make it compulsory we shall be going one step too far. There are many examples where compulsory competitive tendering has resulted in higher costs than those formerly charged by direct labour organisations. The report from Strathclyde clearly shows that a range of services provided through compulsory competitive tendering arrangements does not meet the necessary quality levels.
The Bill provides an opportunity to help local government serve the community in the years ahead. I hope that we shall be able to achieve consensus. The Bill has many factors which the Liberal Democrats, from their experience in local government, want to change. However, the local government commission is so important that I hope that if the Government are prepared to compromise, other parties will put their differences to one side. Ultimately, local communities and the services that they deliver are the most important aspects to consider.

Mr. Michael Alison: The verdict of the hon. Member for Eastbourne (Mr. Bellotti) seems to be that the Bill is good in parts. We should be grateful for small mercies and the modest approbation given to the Bill. The hon. Gentleman mentioned East Sussex county council, and I gained the impression that the town of Eastbourne was casting hungry eyes at the possibility of the takeover or demise of the county leading to the town moving into a larger single unitary authority.
I wish to carry forward the theme of the place of counties in the future structure, but to move from the scale of an ant—East Sussex county council—to the size of an elephant—my own county of north Yorkshire which is, I believe, the largest in the country. I shall consider the future of north Yorkshire against the background of two important guidelines that I believe have been placed before the House. The first is the Government's indication in their draft guidance to the local government commission that they wish local government in principle—and as a preferred option—to move in the direction of unitary authorities broadly as the norm. Secondly, my right hon. Friend the Secretary of State said earlier that "no change" would be an appropriate solution or option in certain areas and in certain circumstances.
I want to make some observations about the implications of those two distinctive guidelines for my


shire county of north Yorkshire. First—and I mention this only to dismiss it and eliminate it as a serious option—there is no case, in my view, for turning the existing North Yorkshire county council into the single unitary authority for the huge geographical area which constitutes north Yorkshire. That is an area of more than 830,000 hectares which extends virtually from the outskirts of Leeds in the south to virtually the outskirts of Darlington and Teesside some 80 or 90 miles up the Great North road in the north. It stretches from the western Pennines on one side to the North sea on the east. That is too big an area for a single county authority to become the unitary authority for the area.
In its public statements, North Yorkshire county council gives a nod in the direction of the proposition that it should become the unitary authority for that huge county. However, it does that I believe only as the ultimate fallback alternative to the possibility of its total demise as an authority.
I want to put before my hon. Friend the Minister for Local Government and Inner Cities the proposition that the north Yorkshire county area might be one of the areas where no change—or at least no absolute change—might be the proper option for the local government commission to consider. I advocate that option because if the county area of north Yorkshire is too big for a single unitary authority, its very size paradoxically involves the deployment of certain services, above all, police, fire, highways and coastal protection and also perhaps some strategic planning functions, which must be organised in an integrated and cohesive fashion if they are to be efficiently organised and deployed over an extended area. For those reasons, they are probably best deployed under a single eye from a single vantage point or base.
Those services could be administered by a consortium of smaller unitary authorities, based on the existing districts, under the so-called joint arrangement or agency facilities. However, if such agency or joint arrangement provisions are to be necessary for certain services in north Yorkshire, a strong case can be made for the retention of North Yorkshire county council precisely for the oversight of the long-distance and strategic services to which I have referred.
I do not believe that the case for retaining North Yorkshire county council rests only or principally on the argument for retaining the education and social service functions at Northallerton. I am agnostic as to where those services might be best located in future in north Yorkshire. They could be devolved to geographically smaller unitary authorities based upon the existing districts, such as Selby district council which is an efficient authority with a commendably human interface and local responsiveness.
I make that point about the potential for placing education and social services with the smaller districts if they were to become unitary authorities, simply because so much devolution and dispersion to local levels is nowadays inherent in the modern approach to running schools and to enhancing the local community dimensions of social services.
However, whether or not North Yorkshire county council should retain education and social services under a retained, two-tier structure, I must place on record the view that the very fact that one can argue cheerfully and

with conviction that North Yorkshire county council should survive in some form into the new era is a powerful testimonial to the calibre of the elected representatives and to the outstanding quality of the local government officers who serve the public from Northallerton under the politically moderate but dedicated and conscientious leadership of John Clout, the leader of North Yorkshire county council.
John Clout leads a good and efficient team and its dissolution would be a loss for local government. I want to place on record how greatly indebted I am for the prompt, courteous and efficient responses that I receive regularly from the county chief executive, Mr. Leyland; the county surveyor, Mr. Moore; the county education officer, Mr. Evans; the county's director of social services, Mr. Ransford, and the other officers of the authority, to the many approaches that I have had to make to them on behalf of my constituents. It is the service which my constituents receive from the county council——

Sir Anthony Durant: My right hon. Friend deserves a lunch.

Mr. Alison: Indeed, a great many lunches would have to be deployed if all the satisfied customers were to be given lunch by the county council.
It is in response to the services that my constituents and I receive with such great efficiency from the county council in Northallerton that I advocate the "no absolute change" option which my right hon. Friend the Secretary of State mentioned this afternoon and which my hon. Friend the Minister will understand. He has repeatedly been kind enough to receive representatives of the county council and discuss some of their peculiar difficulties, such as clearing snow and ice from the extensive roads in the county, and other problems facing the council, to which he has so courteously and helpfully responded after the deputations from my right hon. and hon. Friends and I with John Clout and others.
I hope that the "no absolute change" option will be considered seriously for north Yorkshire against the background of the earlier remarks of my right hon. Friend the Secretary of State.

Ms. Dawn Primarolo: This is proving to be a fascinating debate not only because of its subject, but because we have learnt a new adage from the Government Benches—I paraphrase: "My authority is wonderful, so please leave it intact because it is Tory-controlled, but look at all those wicked Labour authorities elsewhere with which we must deal." In some respects, it is depressing that such a vital part of democracy in a modern thriving country should be so derided and undervalued by Conservative Members.
I want to defend the principle of local government. The principles of local democracy and accountability should be enhanced. Our local authorities comprise officers, professionals and workers who, on the whole, are dedicated people. They are dedicated to the principle of local government. They include teachers, housing workers and social workers who try daily to deliver services that millions of people depend on.
It is a shame that some local authorities have been wrongly accused of self interest in the discussion of local


government reorganisation. Local authorities are attempting genuinely to participate in the debate on local government reorganisation. In Bristol, we have a two-tier authority. We have Bristol city council, which is for the district, and we have Avon county council. Reference was made to whether we would toast Lancaster. I suppose that we in Avon would toast a cosmetics company. I am not quite sure how people identify with the county. The county council has discussed the matter with all the district authorities that make up the county. They have jointly commissioned two universities to examine local government reorganisation and to consider how best to continue delivering the services that local people decide that they want from local government in action. It simply is not true that local authorities are motivated by self interest.
Conservative Members should not be surprised that we do not take seriously their commitment to consultation. We do not believe them when they tell us that they are committed to the principles of accountability and democracy. The reason is that they abolished a level of local authority. I did not see them consult anybody when they got rid of metropolitan authorities or the Greater London council. I do not remember extensive consultation on how fundamentally to change the method of local authority finance when they introduced the poll tax. Lo and behold, as we approach yet another pre-election period—it is difficult to know how many more there will be before election day—the Government claim to be interested in service delivery.
Local authorities in Bristol employ about 41,000 people. They deliver services to hundreds of thousands of people in the county of Avon. They approach with fear and trepidation the instability and insecurity of another chaotic, badly thought out reorganisation of local government. Such an environment is the hallmark of the Government's approach to local authorities. There will be chaos and destruction, not the enshrining of democracy and accountability. The Government, in restructuring local government, have missed an opportunity to provide certainty about the future of local government because of the way in which they have set up the reform process.
I wish to widen the debate to see whether we have a common view of local democracy and accountability. In the mid-1960s, the Labour Government set up a royal
commission, under the chairmanship of Lord Redcliffe-Maud, to examine local government in England. The commission considered that local government was
not to be seen merely as a provider of services.
It said:
The importance
and thereby the purpose
of local government lies in the fact that it is the means by which people can provide services for themselves; can take an active and constructive part in the business of government; and can decide for themselves, within the limits of what national policies and local resources allow, what kind of services they want and what kind of environment they prefer.
That is exactly the principle that the Government are trying to avoid in setting up the commission for local government reform. The matter is to be finance-led, with all the simplistic answers and the lack of reality that are involved. The Government present artificial debates as though some hon. Members who would gaily burn £20 notes and waste local money rather than spend it on delivering the valued services that people desperately need.
More recently, Professor John Stewart has been exploring a new basis for local government which

embraces the ideas of Redcliffe-Maud. Instead of the term "local government", he prefers to use the term "community government". Either way, we know what we mean—local democracy. He says:
The concept of community government or local government is built on three crucial ideas—an enabling authority.
He describes that as one that adopts management structures and processes, that focuses both on community concerns and problems and also on the means of meeting those concerns and problems. This will involve direct service provision, but it will also require the ability to work with other agencies. As authorities adopt a wider role, they have to abandon the assumption that they are a self-sufficient authority—all-knowing, all-seeing, all-doing. That is what the Government assume. They think that they know what everybody thinks, what everybody wants, and exactly how they would want something done in the first place. We must move away from that attitude.
Professor Stewart describes new ways in which local authorities could work with the voluntary sector, with the private sector, and with joint ventures. That is part of our discussion. Professor Stewart talks about a responsible authority seeking to provide services not to the public but for the public, and with the public. That is a different concept of local democracy from the one that is advocated by Conservative Members. In plain language, a responsible authority tries to find out what people actually want and attempts to meet their needs.
Before we hear cries of derision from Conservative Members about current local authority practice, no one is advocating that everthing in local authorities is perfect. Councillors and officers know that, and they are struggling with limited resources, instability and insecurity to try to meet their objectives.

Mr. Wilshire: I know Professor Stewart well, and I have great respect for him. Does the hon. Lady accept that his point, and my point, that needs extend beyond local government services is a key to the issues that we are debating? People need their dustbins emptied, and they need grocery shops, doctors, schools, fire brigades and solicitors. Needs go much further than the argument that the hon. Lady is deploying. Sensible local government and the Conservative Government are concerned about the needs of all people, not just the services that local government provides.

Ms. Primarolo: I tried to indicate that local authorities should have power to co-operate beyond their boundaries and not assume that they are totally self-sufficient. I do not subscribe to the view that we should regard local authorities as public utilities from which people demand exactly what they want. What is missing from the debate that the Government have engendered is the idea that participation in a democracy also requires responsibilities in the provision of services. We are talking about much more than ringing up and demanding that our dustbins are emptied. The debate is about participating in the decisions that are made in the area in which one lives.
Better local government means improving access to services and learning from the public, which is something that Governments find difficult if not nigh on impossible sometimes. It means listening to people and communicating with them about both the services and the standards that they demand. It means extending choice and involving people in decision-making. It means working with people


to provide responsive services. If Conservative Members think that such things are not already happening in local authorities, then, as the hon. Member for Eastbourne (Mr. Bellotti) said about schools, I can say only that they cannot have paid much attention to or visited many local authorities. We need responsive authorities that are accountable to the communities that they represent.
We need to look at the very structure of local government and at why so many women are excluded from participating in it. We need to discover ways of devolving decision-making to ensure that more women can become representatives and locally elected councillors and get involved in the wider debate about local democracy.

Sir Anthony Durant: I have been listening closely to the hon. Lady and agree with much of what she has said, but she has not said whether she favours retaining Avon or wants to get rid of it. She said that "Avon calling" is the only toast that she can think of, so would she prefer Bristol to be the most important authority? I should be interested to know her view.

Ms. Primarolo: I have already said that I favour a unitary authority. I have been trying to say that, before we decide a structure, we must know what we expect that structure to do and how we expect it to meet the hopes and aspirations of the people whom it seeks to represent and who have expressed their views. However, none of that has been taken on board in the criteria that have been set for the commission. The crucial issue of fiscal control in a local authority also determines whether the services that that authority wants to deliver can be delivered.
I should like to demonstrate the sort of things that are happening now in local authorities. As a former councillor, I know that many local authorities have what are called "performance review committees". The Government seem to think that they are the only ones who think about performance and review, but Bristol city council has a core strategy for its performance review committee, which is a sub-committee of its policy and resources committee. It has called the objectives that it seeks to achieve the "six Es for good local government". They are economy, efficiency, effectiveness, equity, empowerment and environment. The council talks about making sure that the community has a representative voice to speak for Bristol and the interests of its people. It talks about encouraging and expanding democracy in Bristol by maximising participation in public life and extending community empowerment. Its objectives refer to accessibility, communication and research into identifying needs. It talks about how to maximise the use of council resources and about how to employ external resources in co-operation. It refers to providing high-quality services and facilities where resources are available. It strives to eliminate disadvantage, discrimination and deprivation. Bristol city council also talks about a corporate management style and about behaving as a model employer.
As we enter a period of local government reorganisation and review with the establishment of the commission, we should be laying down clearly exactly what we believe local government should be about. We must decide

whether it should be simply an outpost of central Government, doing whatever it is told, or an integral and important part of local democracy.
Local government is about services. It should not be used as a basis for ad hoc competition—which is what the Government have sought—because that simply enhances and entrenches inequalities; it does not eradicate them. Local government should reflect local needs. It should be about ensuring that people control their lives.
It is interesting to note that the Government would not extend these proposals to British Gas, British Telecom, the electricity companies, the water industry, the Bank of England, the judiciary or even Government Departments. Imagine if they were subjected to the constraints now facing local councillors in terms of their financial duties and the Government's ability to surcharge them.
The Government are about destroying local government and local democracy and replacing it with pathetic charters that promise everything but guarantee nothing, while isolating people from power and ensuring that they cannot participate in the decisions that govern their lives.
We are facing a golden opportunity that should not be missed. The commission should be given a wider brief to state clearly what is meant by local democracy, how people can be encouraged to participate in it, and how local government can discharge its duties locally.

Mr. Ken Hargreaves: I shall concentrate my brief remarks on part II. We are a conservative nation, with the word "conservative" spelt, I hope, with a capital "c," but certainly with a small "c": we do not like change. That is certainly true of people in the north-west where the local government changes of 1974 were, and to a large extent still are, resented by many people. The move from small urban authorities to large authorities was generally not welcomed. It was accepted only because the new authorities that were eventually established could have been even larger.
Hyndburn, for example, is made up of the former urban districts of Oswaldtwistle, Clayton-le-Moors, Rishton, Great Harwood, the parish council of Altham, and of Accrington non-county borough. Despite the fact that the people of those districts had much in common and that, with the exception of Great Harwood, they comprised a parliamentary constituency, there were many misgivings about the changes. It has taken 17 years of dedicated hard work, not least by the mayors of the new borough, to make Hyndburn acceptable to the majority of its residents. Even now, however, a sizeable minority still yearn for the pre-1974 days. The changes that are now being considered are, therefore, a matter of concern and interest to them.
In all their local government reforms, the Government have always placed much emphasis on accountability. I believe that accountability is greatest when the unit of local government is closest to the people and when people are represented by someone they know, someone whom they see around as they go about their daily lives, someone who lives among them and who knows the area. That is why I support the abolition of the county councils.
If asked, the majority of people would be unable to name their county councillors. They rarely see them and there is little coverage of their activities in the local press. Indeed, press coverage of the activities of the county councils, which account for 88 per cent. of local


government expenditure, is sparse. It could almost be said that the publicity that is given to district and to county council matters in the press is in inverse proportion to the amount of money that the two types of authority spend. Consequently, at county council elections, people do not vote according to the achievements or otherwise of that council but use the occasion to pass judgment on the Government of the day. If local government is to be accountable, it must be local.
When the latest proposals to change local government were announced, I was concerned that we might see an unseemly scrabble, with existing districts seeking to extend their boundaries, especially in east Lancashire, with Blackburn wanting to take over Hyndburn or at least part of it, and with Burnley looking covetously at Pendle. That has not happened. Existing districts throughout Lancashire have acted responsibly and have considered the options open to them seriously and in detail.
Along with the hon. Members for Burnley (Mr. Pike) and for Ribble Valley (Mr. Carr), and my hon. Friends the Members for Pendle (Mr. Lee) and for Rossendale and Darwen (Mr. Trippier), I recently met the leaders and chief executives of the six district councils of east Lancashire. They told us that all the 14 district councils of Lancashire were committed to becoming unitary authorities on their existing boundaries. I and my colleagues were happy to give our support to that case because we are acutely aware of the sense of community that the districts represent.
In my constituency of Hyndburn the council carried out a survey in which all electors were asked questions about what they wanted from local government in the future. The outcome was a ringing declaration of support for the council's case which, needless to say, has all-party support. Let me give some idea of how local people feel. When asked whether a single council providing all services would be more or less responsive to their needs, 60 per cent. said that it would be more responsive. When asked whether that single council should be at county or district level, 71 per cent. preferred the district. When asked whether the local authority should remain at its present size, 72 per cent. said yes and only 12 per cent. opted for a larger council.
The survey also consulted all companies in Hyndburn which employ 20 or more people. Of those, 84 per cent. wanted a unitary authority and 87 per cent. wanted the authority to be based on the district, not the county. In addition, a meeting of religious leaders of Christian denominations and the Muslim community from the whole constituency voted unanimously that Hyndburn was the right size for the unitary authority. I regard that as significant, because clearly those people had no political axe to grind.
I am pleased that my hon. Friend the Minister for Local Government and Inner Cities has emphasised that the aim of the Bill is to ensure that the new structure of local government reflects the identities and interests of local communities. As a life-long resident of east Lancashire, I know how strong are the ties that bind local people together. We are fiercely proud of our history, our civic traditions and the contribution that we have made to the nation's well-being, first through the cotton industry and, more recently, through the multitude of new businesses that have grown up since cotton's demise.
I am pleased that the Government have made it clear that any change must be worthwhile and must not be made merely for the sake of it. I was pleased to hear my right

hon. Friend the Secretary of State say today that local opinions would be listened to, for it would be disastrous if the Government and the commission thought that they could draw neat circles on the map and lump two or three existing districts together for administrative convenience. Lancashire people are not prepared to be pawns in someone else's game. Only they know what is good for them. The poll that I quoted showed clearly what the majority of people want. They want to be rid of a high-spending county council, and they want unitary authorities based on existing districts.

Mr. Eric Martlew: It saddens me to have to speak in the debate. We are discussing the Bill because the Government got it wrong again on local government. They did so on the poll tax and quickly changed their minds. On this matter, it has taken them 20 years to change their minds. The trouble is that they have not told us what they want to do. They have told us that they got it wrong in 1972, but not what we can have. We could have unitary authorities based on the district or the county, or a two-tier system. One could have any one of three there. It does not make any sense.
In response to my intervention, the Secretary of State blamed the Labour Government of 1974 to 1979 for not changing the structure. What a cheek! What would have happened if, in 1974, soon after the reorganisation, we had reorganised again? We had to let the system settle down. We had to suck it and see. By the end of the term of office of the Labour Government, we had decided that the system needed to be changed. Then the Conservative Government came to power and did nothing about it. They left us for almost two decades with a mess.
I feel sorry for councillors of all political persuasions, who have been struggling on since 1974 with a system that does not work. It was introduced by the Conservatives, despite Labour Members telling the Government that it would not work. Since I entered the House in 1977 I have been shocked at the way in which the Conservatives denigrate local councillors. It is an absolute disgrace. Often they denigrate councillors of their own political persuasion. There is an arrogance about the Conservatives. They think that they know what is right and what will happen. I suspect that if we read the fine print of the Bill we would find somewhere a provision to enable the Secretary of State for the Environment to appoint the mayor of Carlisle. That is how extreme the Conservatives are in destroying local democracy. They do not give a fig about what councillors think.
It is important for a political party to control the local council which can stand up to the national Government. We need checks and balances. If the Conservatives are in power, the only way to check their abuse of power is to have Labour councils. That is why the Conservatives have tried to shackle Labour councils over the years.
There is some anxiety that we do not know when the local government reorganisation will happen. Will the commission start in Cornwall and work up to Cumbria, or start in Cumbria and work down to the Isle of Wight and Southend? We are not told. We are told that the reorganisation will not be uniform and will not take place on one date, such as 1 April 1994. It is a timetable for chaos.
The Government's proposals will be a fiasco if the Government have the opportunity to implement them. At any one time some councils will be getting ready to change, others will already have changed and others will not know what is to happen to them. How will it be possible to appoint officers to those councils? Will the best officers settle for an authority of which the structure is already settled? Will they wait in an area which may no longer exist? How will it be possible to hold local elections in such areas? We need annual elections, but will councillors wait about to see whether their authority will be dissolved? It will not work.
Many Conservative Members have spoken about their experience in local government, so I suppose that I might also parade my campaign medals. I served on a county borough for two years before it was abolished. I served until 1988 on a county council and for two years had the pleasure to be the chairman of that council. My right hon. Friend the Member for Halton (Mr. Oakes)—his constituency is basically Widnes, with bits added on—said that people born in Cumbria were proud to be called Cumbrians. That is all right if one comes from Cumberland, but not if one comes from Westmorland or the furthest parts of Lancashire. Down there we are still proud to be called Lancastrians. It would be nonsensical to give any serious thought to unitary authorities based on counties the size of Cumbria.
We have heard a great deal about whether education or social services could be administered by district authorities. It would depend on the size of the authority. No one has suggested for one moment that housing could be run by a county council. We all see housing as a service which must be near the people. That would be difficult to achieve in a large county council.
The Government appear to be giving the nod to unitary authorities. I said that it would be a fiasco if all the councils did not change on a certain date. I hope that if the Government look to unitary authorities to set the lead they will consider the historic cities which have perhaps 800 years history of looking after themselves and controlling the way in which they develop. In two decades that tradition and that expertise have not been lost. I am sure that the councils of the historic cities could very quickly become all-purpose authorities. I come from the historic city of Carlisle, which has had a royal charter for 800 years. I hope that if it is decided to go for unitary authorities in my area that fact will be taken into account.
Here again, we are talking about compulsory competitive tendering. This is an aspect of the Bill that concerns me deeply. In my maiden speech in the House in 1987 I said that one would find it easy to save money if one were to cut wages and holiday entitlement, get rid of entitlement to sick pay and do away with pension provision. That is not a measure of efficiency, although perhaps it is a measure of meanness which will be easily recognised by Conservative Members, who do not care what price the workers have to pay so long as the poll tax payers or ratepayers—or whatever they are—have to pay less. It is not difficult to have that kind of efficiency in services if one is prepared to create a pool of unemployed people willing to take jobs at any wage better than the dole that the current Government provide. That is what this is all about. It is not about efficiency; it is about cutting costs.
That is one of the reasons for the Conservatives' strong objection to our plan for a minimum wage. If the minimum wage were set at £3.40 an hour many of the cowboys who are running the services would have to increase the wages that they pay. Thus they would not be able to compete with local authorities and would go out of business. Of course, in many areas that will not happen as the local government structure has been destroyed. In many areas it would be impossible for refuse collection to be carried out by local authorities because all the wagons have been sold off. People will end up paying more to private contractors when those contractors get away with paying low wages.
Under other provisions of the Bill the same thing will be done to white-collar services. I do not understand. No one would run a private business like this. No one would suggest that the personnel function of a multinational company should be tampered with to the extent of 25 per cent., as is proposed in the Bill. [Interruption.] On that point I am prepared to give way to any hon. Member.

Mr. Wilshire: Surely the hon. Gentleman has heard of consultants. Firms, large and small, the length and breadth of this country and of every other country bring in experts to deal with specific matters.

Mr. Martlew: If the hon. Gentleman is talking about the personnel function let me tell him that I used to be the personnel manager of the largest boot company in the world. I can assure him that that company was very efficient and that it did not farm out its personnel function to private contractors. It knew that if it were to do so it would not get as good a service and that the cost would be twice as high.
Now there is talk of CCT in legal and financial services. Has any hon. Member ever spent a morning talking to a solicitor or an accountant? Any who has will know that a month later, when the bill arrives, it looks as if the discussion lasted a fortnight. The provision of services in this way is by no means cheaper. One could spend the equivalent of a year's poll tax in a morning's consultation with a solicitor.

Mr. Dalyell: Last week I spent a morning with Mr. Alex Linkston and Mr. John Spraggon, who are senior officials of West Lothian district council, and with Councillors Graeme Morrice, Jimmy McGinley and Jim Clark. We were dealing partly with precisely the enormously difficult issue of legal services. The people to whom I spoke are concerned about the fact that low tenders received from firms paying lower-than-minimum wages would be absolutely false in the event of the introduction of a minimum wage or a decent wage. This is exactly the point that my hon. Friend is making.

Mr. Wilshire: rose——

Mr. Martlew: I will give way to the hon. Gentleman.

Mr. Deputy Speaker (Mr. Harold Walker): Order. Later perhaps, but we do not have intervention upon intervention.

Mr. Martlew: Let me return to the main theme. Privatisation of this kind will not result in a saving of money. We know that professionals such as architects, lawyers and accountants are probably the most expensive people in the world to employ by the hour. Any councillor who has ever been involved in a dispute about a legal


ruling will know that the chief executive says that it may be necessary to get an opinion from Queen's counsel and that, in that event, the council has to consider whether a supplementary estimate is necessary to pay the QC's bill. Once the professional essence of local government has been destroyed it will not be recoverable, and the councils will be ripped off by the private sector.
All this is nonsensical. The Secretary of State, referring to our objections to compulsory tendering, said that what we were in favour of amounted to jobs for the boys. If I have ever seen anything that amounts to jobs for the boys this is it. It is jobs for the boys in the Law Society and the Rotary club, and my constituents and their constituents will pay. It has nothing to do with efficiency, but everything to do with the fact that the Conservative Government do not understand local government and, therefore, fear it. The Conservatives are not fit to pass any laws on local government, as is evident to anybody who looks at their record. Let us consider the poll tax, of which the Minister for Local Government and Inner Cities, who is on the Government Front Bench at present, was a great advocate. That is not mentioned these days, but it is a fact. The right hon. Member for Worcester (Mr. Walker), who piloted the Local Government Act 1972 through the House, should have had the decency to come here today to hear his own side denigrate that Act. Conservative Members do not understand it, are afraid of it and will try to destroy it.
This Bill has nothing to do with improvement. It will only create confusion and low morale in local government. Having talked to many local government people at the weekend, I know that morale has never been lower. The Government are creating uncertainty. There will be many early retirements, as there were the last time. It will cost the councils a fortune. In addition, the former officers will reappear as consultants earning twice as much as they did previously. Let us vote against the Bill because it fails to provide for democratic local government to take us into the 21st century.

Mr. Douglas French: I congratulate my right hon. Friend the Secretary of State on the introduction of this Bill. I welcome very much the citizens charter and the financial accountability measures contained in part I.
Like several other hon. Members, I want to address my remarks to part II—in particular, clauses 13 and 14, which establish the local government commission and give it power to recommend single-tier authorities in place of the two-tier authorities, having had regard, as is specified in clause 13(5),
to the identities and interests of local communities".
The intention is to secure effective and convenient local government, rather than, as the hon. Member for Bristol, South (Ms. Primarolo) tried to argue, to destroy local government.
The Bill makes one thing very clear indeed: there is absolutely no intention to indicate a preference for districts over counties or for counties over districts. It seems to me that that is fundamental to the content of the Bill, and people who seek to read some political point into it are barking up the wrong tree.
My right hon. Friend, in his opening remarks, and my noble Friend the Baroness Blatch, in her speech in another place, made it clear that there was a presumption in favour

of unitary authorities but that in those places where the arguments appeared to favour the continuation of two authorities that was a perfectly satisfactory solution. In other words, the proposal being put forward by my right hon. Friend the Member for Selby (Mr. Alison)—that in some circumstances there would be no change—is a positive and acceptable decision. I very much support that approach.
The proposals before the House are of particular relevance to a certain group of local authorities. I refer to those cities which formed the historic cities group following the consultative document on the structure of local government published in April 1991. The participating cities are Cambridge, Canterbury, Carlisle—we have heard from the hon. Member for Carlisle (Mr. Martlew)—Chester, Exeter, Lincoln, Norwich, Oxford, Worcester, York and the great city that I have the honour to represent, Gloucester. Hon. Members will notice that those cities display a cross-party political complexion and that the hon. Members representing those cities show some variations in their enthusiasm for the Bill's proposals, although, having spoken to all of them, I have gauged that there is broadly a majority in favour of the Bill.
The councils running those authorities have chosen to join the historic cities group because they see much greater opportunity for securing an effective and convenient local government with unitary status than without it. That is the aim of the Bill. Therefore, as my right hon. Friend the Member for Southend, West (Mr. Channon) said, it is surprising that the hon. Member for Dagenham (Mr. Gould) expressed himself so firmly against the proposals for unitary status. As has been said, he will find that a number of councillors representing the Labour party do not agree with his views.
All those historic cities, with the possible exception of one, had county borough status up to 1974, so they have had extensive experience of running their own affairs. As long ago as 1483, my city of Gloucester received a charter to run its own affairs, and it continued to do so successfully until 1974.
Many other cities may equally make out a strong case for unitary status but were not county boroughs before 1974 and nobody is suggesting that county borough status should be a necessary qualification for a city to achieve unitary status now. It is only that the existence of previous county borough status is likely to result in the criteria that the local government commission will be looking at being more readily, easily and obviously satisfied.
The local government commission will be called upon to consider the identities and interests of local communities—what I would describe as civic and community loyalties. In other words, it will find out to where and to what group the residents living in that area look. It is, dare I say it, the local government equivalent of what my right hon. Friend the Member for Chingford (Mr. Tebbit) once described—thereby attracting a great deal of criticism—as the cricket test. Where do loyalties lie? If people live and work and have the centre of their lives in a great historic city such as Gloucester, they are more likely to feel that that city will represent, and protect where necessary, their interests. However well meaning and diligent a councillor living in a rural hinterland may be, he cannot hope to understand the wishes of people who live in the city as well as they do themselves. He has chosen to live in the countryside, and that is what he knows about.
Historic cities have an intensely and characteristically strong community identity. They are an integral and highly important part of the country's national heritage, with civic traditions stretching back many years. Local people look to the city for local identity and community loyalty. Therefore, it is logical and appropriate that the city to which they look should be responsible for delivering the services that affect their lives.
One factor that welds together their loyalty is historic tradition. When the Bill was debated in the other place, my predecessor, the Baroness Oppenheim-Barnes, argued that historic tradition should be taken into account by the local government commission when it assessed the suitability of an area and of an authority for unitary status. I entirely agree with that argument. Historical tradition means awareness of, adherence to and respect for the long-established customs and practices of a community.
When the local government commission considers the identities and interests of local communities, it could scarcely ignore the historical tradition altogether, but precisely because some candidate authorities will not have any historical tradition worth mentioning, I should like to see the words "historical tradition" included in the Bill as one of the factors that it should take into account. It is very important that the commission fully appreciates the extent to which historical tradition is an ingredient in community identity in these cities.
I was pleased to see that this theme was acknowledged by the Government in the debate in the other place and is likely to figure prominently in the guidance given to the commission. The draft guidelines published in November refer to taking into account the history of an area. That is a step in the right direction, although the history of an area is not quite the same as its historical tradition.
In my authority, there are many examples of problems caused by division of responsibilities between the city of Gloucester and the county council of Gloucestershire. Despite all the efforts of the county council and those who work for it, who I am sure do their best, they are cast in an impossible role.
Let me give some examples. There has recently been a dispute over the planning permission for a major new building—a magistrates court—to be located in the centre of Gloucester. This received planning approval by the county despite the fact that the plans had been condemned by the Royal Fine Art Commission, English Heritage and Gloucester Civic Trust as unsuitable. The popular view in the city was that the proposed building was inappropriate for the site for which it was planned, which abutted the narrow streets of a mediaeval planned city. However, this factor did not sway the planning authorities on the county council and as a result that application is to go to a public inquiry.
Another example is social services. Three years ago, there was a particularly tragic case in Gloucester of a deaf-blind adult, Beverley Lewis, who was found dead in circumstances of neglect. There was a strong feeling within the city that the social services department of the county had been predominantly oriented towards a rural, affluent country area, and had not been sufficiently tuned in to the far different difficulties of a close urban environment.
Another example is education. Over many years, there has been widespread dissatisfaction with the county

education authority, which has not always promoted the best interests of the city schools. Such schools should be administered by people who know and feel for them rather than by people who are remote from them.
Yet another example is the highly dubious roads and traffic planning situation. Here again, the interests of the city and the county do not always come together in a convenient and sensible way. Nor does the existence of two authorities make the preservation of heritage any easier, and the preservation of heritage is of prime importance in any historic city.
In about the past 12 months Gloucester has won four national awards, including those for the best tourist destination and the best practice for regeneration. The best practice award was given to the Gloucester docks development scheme, which is now attracting over 1 million visitors a year. This achievement, which is very much to the credit of the city council, was not made any easier by the overlapping responsibilities of the city and the county. In some instances there was a duplication of responsibilities involving the management and provision of tourist attractions. There were complications over museums, libraries and historic buildings, and the services that go with them. Unitary status would avoid that type of problem.

Mr. O'Brien: The hon. Gentleman is giving examples of the various services that could be carried out by a unitary authority. Education and social services are reasonably straightforward, but he referred to planning. How does he see unitary and strategic planning procedures being carried out under the present proposals?

Mr. French: My example was of a building which was to be erected within the city of Gloucester, not in the county. It was to be used largely by those living in the city. It was to be seen every day by those people. Yet it was proposed that it be built to a design which was widely regarded as unacceptable to the people in the city. I am endeavouring to argue that decisions that so closely affect one community should not be significantly determined by those who live somewhere else.
When it comes to planning there has, of course, to be consideration of factors that are part of the wider strategic plan. That consideration applies especially to transport and roads. There has to be a broader plan and broader decision-making on the zoning of certain areas. The establishment of a unitary authority does not mean that that authority will consider factors that relate only and specifically to the geographical area over which it has control. Any unitary authority will have to bear in mind also the broader strategic balance. I see no difficulty in that.

Mr. O'Brien: The Bill does not bring clarity to any of the issues raised by the hon. Gentleman, especially that of strategic planning. It does not tell us where functions will lie. If he agrees that there is a need for that identification, will he press the Secretary of State to ensure that it is included in the Bill?

Mr. French: The Bill will establish a local government commission, which will be provided with guidelines to determine the work that it does. Within those guidelines several factors have to be taken into account. If the commission follows the guidelines as set out—no doubt


they will be refined, but we have a draft set—it seems to be highly likely that it will need to take into account the very point which the hon. Gentleman is making.
I shall complete the examples that I was giving earlier. There is confusion over local taxation as a result of the presence of two authorities. Perhaps the prime example is the community charge. Although the city council had the responsibility of collecting the charge, the county was to spend the overwhelming majority of the moneys. It was not clear to the residents of the city where their money was going. Nor was it clear, unless they examined the small print on their bills and the accompanying literature, how the money was spent. That clouds accountability between county and district.
As my hon. Friend the Member for Reading, West (Sir A. Durant) said, people do not know who does what. I say that people do not know who spends what or who receives what from funds raised locally.
Why is the situation now different from how it was viewed in 1974? There is a difference for the fundamental reason that has been mentioned earlier, which is that local authorities now are much more enabling authorities than they were before. It is not necessary now for local authorities to be responsible for providing every service themselves.
Notwithstanding the argument that has taken place during the debate over the cost of consultants, the fact remains that it is now possible to deliver virtually every service that a resident within a certain area requires even when the population of the area is extremely small. As the role of an enabling authority is now understood and is being practised, the size of the authority, even if it is a small one, does not stand in the way of it achieving unitary status. There will be—I expect this to happen—some examples where unitary status in respect of certain services is not regarded as practical. In that event, joint arrangements can be organised with a lead authority.
The second difference between now and 1974—this is apart from the growth in understanding of the enabling role—is that cities have generally become much more involved in a wider range of local issues. As my hon. Friend the Member for Spelthorne (Mr. Wilshire) said, they are meeting the needs of people and not merely providing services. This is clear in Gloucester, where the local authority plays a part in economic development, tourism, leisure, pedestrianisation plans and conservation. It is now involved in many areas with which it would not have been concerned previously. It is artificial, highly bureaucratic and impossible to try to separate some of the responsibilities and functions that cities perform well from those which they are not allowed to perform at all without having first consulted the county council and obtained its agreement. Responsibilities and functions should be brought together.
Where unitary status is ultimately decided upon, I believe that local government will be more efficient, more effective and more economical and that there will be less duplication, confusion and delay and an end to divided responsibilities that lead to buck passing. Successful democracy requires accountability, which the Bill seeks to strengthen, and that requires people to know where responsibility lies. There must be clear and simple lines of communication and decision making. I think that the Bill and the proposed commission will deliver that, and the sooner the better.
One or two aspects of the commission's work worry me. It will examine which structure is best for which area. As my right hon. Friend the Member for Southend, West asked towards the beginning of the debate, "What constitutes an area?" When my hon. Friend the Minister for Local Government and Inner Cities replies, I hope that we shall hear more about the definition as he understands it.
My second reservation about the commission is that it will have a rolling geographical programme. That suggests a rather leisurely timetable. If the commission's work is allowed to spread over too long a period, it is highly likely to get bogged down and to run into unwelcome difficulties.
My right hon. Friend the Member for Southend, West suggested that the commission might start its work by considering areas of dissatisfaction, and he cited his constituency as one. That is one possible approach, but I suggest another for consideration: the commission should start its work by considering areas that have common characteristics. I suggest that the historic cities are much at the forefront of that category. They have a powerful case, which I think deserves to be heard early in the proceedings. I believe that the commission should consider the most obvious cases first.
The commission will need to be firm and efficient in the way in which it conducts its work if the ensuing debate is not to become an unseemly squabble between counties and districts. That must be avoided, or the result will not benefit individual residents—whom this Bill is designed to help—and it will discredit not only central but local government. Local residents would be disadvantaged.
The way that the commission conducts itself, the method of operation and the planning of its work are vital to the success of the Bill. I hope that very careful consideration will be given to that.

Mr. Tam Dalyell: The basic lacuna, and a source of great personal sadness for me, is that I never served in local government. I am the first speaker tonight from this side of the House who has not done so. Those who have not served in local government are, in a sense, incomplete in their political education. Therefore, in my almost 30 years in the House this is my maiden speech on local government matters. My reason for speaking is that West Lothian district council is concerned about the Bill. I have a very good relationship with the council. I met senior councillors and officials and listened to what they had to say, and I found their case compelling.
I have given notice to the Scottish Office that I wish to ask the following questions. First, will the Minister confirm that the Government are looking positively and constructively at the de minimis provision being increased from the current £100,000 to £250,000, as mentioned in the debate on 17 December 1991? From the information provided to me, it is clearly counterproductive in terms of value for money to go through the tender procedure for small contracts.
Secondly, in the event of an authority losing a contract resulting in the abolition of the in-house facility, will the Minister confirm that should that authority not be able to obtain satisfactory competitive prices second time around, additional resources will be made available either to fund the higher costs or to re-establish the in-house provision?
Thirdly, West Lothian has a clear policy of providing quality, customer-driven services to its community. In the event of the authority having misgivings about the capability of the lowest tenderer to maintain a quality service, what remedies are available to it at tender evaluation?
Fourthly, the cost of a performance bond is a real cost to a local authority and is necessary to safeguard customer interests. The Government's proposal to deduct the cost of that from the private contractor bid at tender evaluation is illogical in terms of value for money. Will the Minister reconsider that aspect?
Fifthly, what proposals do the Government have regarding the way in which future work will be packaged? In the provision of quality services, it is essential that work is packaged in a way that facilitates value for money and customer satisfaction, and is not artificially packaged to facilitate commercial considerations.
All those points were raised 10 days ago with the Scottish Minister—the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton)—and I today confirmed that I would raise them again in this debate.
I wish to make two other points. The first is the timing of the stages in tendering exercises. West Lothian is a responsible authority and I have worked in harmony with it for 30 years. The timetable proposed would take between eight and 10 months from the date of the initial advertisement to the start of the contract. That would be inappropriate for certain contracts—for example, building works—and there is an argument for setting a de minimis level for such an extended time schedule. For many elements of professional work, speed is of the essence and flexibility for short time scales must be permitted.
The period from announcement to the start of the contract is crucial and it should be kept to the absolute minimum. Otherwise, the council feels that if in-house bids are unsuccessful there will be little motivation to perform well, and the result would be detrimental to the community. Will there be a change to the current tender timetable? If so, the time scale should be restricted to one or two months respectively.
I wish to revert to my comments on the performance bond. The cost of the bond is a real cost to the private contractor, and one that will have to be paid by the client if the contract is awarded externally. The Government's proposal to deduct the cost of the bond from the private contractor's bid would artificially reduce it and could have the effect of the client paying more for the work because of that notional adjustment. That does not equate with the need to obtain best value for money and it should be strongly resisted.
I would not have dared to participate in this debate were I not absolutely convinced that it is an argument about value for money. Mr. Linkston, the chief executive of West Lothian, and his colleagues persuaded me that some of the proposals are, in effect—at least, for smaller authorities—against a decent value-for-money concept.
The case against compulsory competitive tendering must be strongly put. It is against local democracy. Councils will be denied the right to decide how best to organise and procure professional services. Value for money is not determined by cost alone. Commercial organisations, such as that referred to by my hon. Friend

the Member for Carlisle (Mr. Martlew), recognise that. I am a member of the all-party retail trade group and we visit large organisations such as Sainsbury and Safeway. They recognise that value for money is not determined by cost alone and they do not appoint on the basis of lowest cost.
Professional fees are a small percentage of total project costs, and savings in that area can be quickly eclipsed by poor design and inadequate consideration. First cost will predominate; no recognition will be made of the life cycle cost. Surely any prudent authority must be concerned with life cycle cost. Councillor Graeme Morrice argued at considerable length, and with great persuasiveness, that life cycle costs are all important.
Quality and lowest cost are incompatible. No other country in Europe selects contractors on that basis, so why should we apply that criterion to consultants? The professional institutions—for example, the Royal Institute of British Architects—whose members arguably have most to gain by an increased workload, have firmly and publicly declared against competition. There will be lack of continuity, discontinuity of service delivery and irreversible loss of valuable skills and resources. My hon. Friend the Member for Carlisle, with his great experience as leader of his council, put the irreversible nature of the loss very strongly.
Proactive team work will be precluded. Service issues of confidentiality, propriety and commercial benefit are at stake in relation to policy advice. Substantial increased costs are inevitable in the tendering process, briefing, monitoring and arbitration of claims and disputes. Role separation will result in design and specifications being changed from practice and practitioners from feedback.
Let me say a word about architectural and engineering services. Clarification is required on design and feasibility projects that are carried out in-house, outwith the architectural services department, to ascertain whether such work is excluded from competition. The market place is currently organised on a single-project basis, with professional services procured primarily by individual discipline. Clarification is required as to whether it would be anti-competitive to package work on, first, a full financial-year basis—or on the basis of a longer period—and, secondly, a multi-disciplinary basis.
My friend and political opponent Councillor Jimmy McGinley has made a special study of the effects on the architectural and legal departments. He, too, was entirely able to persuade me that it would be extremely imprudent not to take account of what really happens in council work. The quality and ability of contractors are crucial, and local authorities must be left with maximum flexibility in assessing those qualities and taking them into account.
The professional organisations have already pointed out that lowest price is not an appropriate method of assessing and appointing professional contractors. Applying CCT to professional services introduces serious problems of confidentiality, conflict of interest, indemnity insurance and so forth without a realistic prospect of improved efficiency or cost savings. Those potential problems will make contractor supervision expensive. In recessionary times, professional services in local authorities may seem attractive to the private sector, but the opposite is true in boom times. There will be serious consequences for local authorities.
Efficiency of professional services is best achieved by the introduction of trading accounts for all professional


units. There is no good reason for applying different rules to architects and property management. Trading accounts and league tables of local authorities—coupled with direct comparison of fees from the private sector—is a much better route to the measurement of efficiency.
Concern for quality is identified in relation to a proposed system of "two envelope" tendering, and a plea to professional institutions to recommend that low measurements of competition be built into the quality threshold. Quality and lowest cost are incompatible. The Government indicate pre-qualification on a quality threshold, but determination on lowest cost. The concept of "two envelope" tendering is related to determination and quality.
I have had my time, and I shall leave it at that, but these are serious questions, posed by practical, serious people.

Mr. David Atkinson (Bournemouth, East): I give an unreserved welcome to the proposals in the Bill. They reflect the logical way forward for the development of local government services and structure, taking full account both of the experience and success of compulsory competitive tendering and of the undoubted wish of local people—including my constituents—for the return of unitary authorities.
During the Committee stage of the Local Government Bill 1988, I moved an amendment—it was later withdrawn—to add five services to the seven that, under the Bill, were already subject to CCT. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), who was the Minister responsible for piloting the Bill through Committee, pointed out that the amendment was not necessary, because, under the Bill, such extensions would be made later by order. The advantage of this Bill is that it enables us to take full account of the experience of CCT to date.
Fourteen years ago, the country was moving in the opposite direction from that proposed in the Bill. The Labour Government of the day allowed direct labour organisations to provide local government services without a cost-competitive test: it even allowed them to provide other local authorities with such services. Indeed, Labour's 1979 election manifesto anticipated the further expansion of DLOs, in addition to the takeover of local building firms by workers' co-operatives. It was the "winter of discontent" which discredited for all time the notion that public service unions would put patients, and other consumers of services, above their own vested interests.
The present Government began to reverse that trend by putting DLOs to the test of competitive tender in building and maintenance in the Local Government, Planning and Land Act 1980. However, the work of pioneering councils such as that of my right hon. Friend the Member for Southend, West (Mr. Channon)—who earlier reminded us graphically of its contribution—was required to prove that the tendering of service provision to private contractors was needed to expose the waste and inefficiencies that had been tolerated by town halls for far too long.
As we now know from research conducted by Birmingham university, the London business school and not least the Audit Commission, CCT works, achieving savings of 20 per cent. or more. More important, however, has been the direct effect that it has had on the entire

management structure of local government at all levels—from the officers at the top to the point of delivery at the bottom. That has been experienced at first hand.
CCT has exposed gross inefficiencies that were formerly taken for granted by town halls and county halls. It has encouraged new attitudes, new methods and new training, and a far healthier relationship has developed between client and contractor, including direct service organisations. To date, however, the vast majority of contracts—some 80 per cent.—have gone to the DSOs, which did the work before CCT. There is nothing wrong with that; value for money is the principal test and, if the DSOs can do the work efficiently at the lowest possible cost, they should receive the contract. It is a pity that the prospect of tendering has had to act as a catalyst to produce improved efficiency.
Now that the private sector has had time to get its act together, with new companies—for instance, the water companies—now prepared to enter the field, I expect it to be more successful in bidding for the service contracts for which the Bill provides, as well as existing contracts when they come up for renewal.
One benefit of not extending CCT to further services until now has been the opportunity of learning from the experience to date—for example, the unfair practices adopted in favour of the DSOs. It is, for instance, clearly wrong to include internal redundancy and the winding-up costs of DSOs in calculating the total cost of a private-sector bid, as it is to define a contract so awkwardly that only the existing DSO would possibly fulfil it. Another example is the denial to all private-sector bids of access to council depots, along with the provision of such access for DSOs. The Bill will, I hope, outlaw all such public-sector biases.
It is, of course, equally fair to insist on a level playing field for public-sector tenderers, to allow them to bid for private-sector contracts. They cannot do that now. For example, the building design practice section of the former architects' department of Dorset county council will have to make staff redundant or cease operation altogether if it does not succeed in its present bid to retain all its duties next year. It has sought permission to tender for work in the private sector which would broaden its experience; unfortunately, it cannot legally do that now. Such a development could only enhance competition, and I hope that my hon. Friend the Minister will bear it in mind in Committee.
Experience of the 1988 Act also suggests that we should now ensure that the quality of professional services, such as architecture and engineering, is fully taken into account in the contract process, as the original Bill proposed before its amendment in the other place. I am pleased to learn that my right hon. Friend is proposing a new formula for a quality threshold clause. It must be right to insist that those submitting bids have the expertise, experience and resources to complete the contract for which they have put in a bid.

Mr. O'Brien: If it is correct that quality should be included in compulsory competitive tendering for white collar services, how can the hon. Gentleman say that that should not apply to compulsory competitive tendering for other local government services?

Mr. Atkinson: The hon. Gentleman has made a good point. He intends, perhaps, to say that a level playing field


should apply to existing services, subject to the contract process, as well as to what is being proposed in the Bill for white collar services.
As a result of compulsory competitive tendering, local government services are being undertaken today more efficiently, to a higher standard, at better value and at a saving of millions of pounds to the charge payer. Usually they are being undertaken by a happier, more fulfilled and better-rewarded management and work force, yet Labour still talks about abolishing CCT and the Audit Commission which pointed the way to such achievements. On the contrary, I hope that the Government will commit themselves to going still further in the privatisation of local government services. I suggest that the 24 provincial airports, 54 ports and harbours and 38 bus companies should be privatised, all of which remain in council hands.
As for the provisions that will establish a local government commission, I point out to the Minister that the prospect of a return to a unitary authority has been particularly welcomed by those of my constituents who remember Bournemouth as it was until 1974—a county borough council. It was a great mistake to abolish the county boroughs, the finest units of local government anywhere in the world. I do not believe that the schools, roads, libraries, public protection, traffic management and the magistracy in my constituency have been better served by remote control from county hall, given the competing priorities of a mainly rural county and the absence of personal local knowledge and accountability that borough councillors provide.
Unfortunately, unlike my local Conservative association, which has submitted clear proposals for Bournemouth to have as much control over its own services as possible, our local Liberal council is calling for additional tiers of local government, such as neighbourhood councils and regional authorities. Like so much else of Liberal policy—all of which is adopted by default—these proposals will lead to greater bureaucracy, add to the cost of local government, for which the charge payers must pay, and will be unnecessary if local councillors are doing their job properly, with proper two-way communication between themselves and those whom they are elected to represent.
Moreover, the Liberal alternative of a single authority in my part of Dorset, which is dubbed by the local press as Wessex city, for an entire Bournemouth, Christchurch and Poole conurbation would be a disaster locally. The common pooling of resources and the sharing of services between two or three of these authorities must arise from sensible negotiation on common problems such as tourism and community care and must not be imposed upon them by statute.
In determining the districts that are to become unitary authorities, the new commission will appreciate that there cannot be a return to what happened before 1973. Thanks to this Government's policies, local government has evolved to a considerable extent. It is local government's new role, as an enabler of services and as the contractor of services, that justifies this important review. There is no longer any question of returning to the unnecessary duplication, by districts, at the expense of economies of scale that justified strengthening the counties in 1973. Nor

does any future reorganisation have to be as costly, as was demonstrated by the abolition of the metropolitan counties a few years ago.
It is essential that the commission should include among its membership the practical input of serving councillors at all levels to determine the merits, costs and benefits of the submissions that will be made to it. I look forward to the Minister's assurances on that point. I welcome the appointment of Sir John Banham as the commission's chairman, in view of both his Audit Commission past and his undoubted success at the Confederation of British Industry.
I understand that my right hon. Friend the Secretary of State for the Environment intends the new local authorities to be in place and to take over in May 1994. Presumably, therefore, he has in mind elections to those local authorities in May 1993, next year, and believes that they should shadow the present authorities, as happened between 1973 and 1974 when the previous local government reorganisation took place. I hope that the Minister will confirm that that is to be the programme.

Mr. Ian McCartney: I understand that before the 1974 reorganisation there were no elections and that the local authorities set up joint arrangements for the distribution of services in preparation for subsequent elections. What the hon. Gentleman says is historically incorrect and, in practical terms, is an utter shambles.

Mr. Atkinson: I well recall being elected to the new Essex county council, representing a Southend ward, having previously served on Southend county borough council. Between May 1973 and May 1974 we acted as a shadow council, preparing to take over and working with the existing retiring council on our new responsibilities.
I am sure that I speak for most of my constituents when I say that we greatly look foward to this opportunity to restore a Conservative administration to Bournemouth, in view of the increase in the community charge that is threatened for the forthcoming fiscal year. It cannot come soon enough.

Mrs. Maria Fyfe: Earlier this evening a Conservative Member offered the opinion that this is a conservative country—he hastened to add with a small "c". I think that he is likely to find out before many more weeks are over that the country is less conservative than he cares to believe. It is certainly a lot more conservationist.
It is a pity that my hon. Friend the Member for Linlithgow (Mr. Dalyell) has had to leave for a meeting. An interesting article in today's Daily Record shows that my hon. Friend has been named as the most environmentally friendly of all Scottish Members of Parliament. That was said by a panel of expert ecologists, led by David Bellamy. Interestingly enough, the same group was asked for nominations for the booby prize when it came to environmental issues. One of the nominees was none other than the Secretary of State for the Environment. That says a great deal about this Government if the Secretary of State can be nominated for the booby prize by those who are most concerned about these issues.
I intend to refer to clauses 8 to 11. I did not hear all of the Secretary of State's speech, but for several hours I have


listened to Conservative Members speak about the Bill's provisions. I still have to be told why the Government refuse to make public the results of the PA Consulting Group study. Could it possibly be because they were advised against putting out a number of services to tender? They have received advice that certain services are not candidates, or are not good candidates, for compulsory competitive tendering. The examples given included the development of corporate strategy, committee administration, membership services, electoral registration, financial planning and advice and personnel recruitment, yet we find that they are on the list of services proposed to be pushed out to compulsory competitive tendering.
The Government published a consultation paper at the same time as they published the Bill. If the Government seriously intend to consult people properly, I wonder what time scale they have in mind. What assurance can any of us possibly have that the Government will pay any attention whatsoever to views expressed against the contents of the consultation paper?
That is especially the case when one considers that in Scotland in particular the Government asked for people's views about hospitals being taken out of the national health service and given trust status. Despite the fact that the Government consulted widely and were told by the vast majority of people that they were against hospitals being given trust status, and the doctors were against it, they went ahead and imposed trust status upon hospitals in Scotland. Such consultation must be regarded with much suspicion. We know perfectly well that the consultation period will be short and that the Government do not intend to pay the slightest intention to views, no matter how well informed, that are contrary to their wishes.
I have seen a long list of services that the Government intend to put out to compulsory competitive tender, of which I am sure Conservative Members are well aware. I could hardly believe my eyes when I read that home-to-school transport was included. I should have thought that, above all, it is essential to have a reliable service so that parents know that their children are safe. If other, more lucrative contracts are won by the firm that wins the local government contract, it might easily let down the local authority. Where will that leave children? I am not talking only about them making their way home in bad weather, but young school children who are vulnerable and could be endangered by traffic and people of ill will. That proposal requires second thoughts.
My hon. Friend the Member for Carlisle (Mr. Martlew) mentioned corporate services such as personnel. We are all aware of firms offering their services as head hunters and selectors of personnel, but what about the important personnel functions of training for the skills that are necessary in a local authority? What about the difficult issues of discipline and dealing with appeals by employees? I cannot see how an outside firm will be able to deal with such issues fairly. How will employees be able to place their trust in the objectivity of the judgment of an outside firm, paid by the local authority?
I can hardly credit the Government's proposals for financial services. The accounts of large councils such as Glasgow district council run into millions of pounds and have to be brought in on time. Year-on-year estimates are an enormous job. A local council may be left in severe difficulties if it is let down by a company that has been awarded the contract. Local authorities already find it

hard to cope because of the Government's impositions on them, but the Bill does not seem to heed the need for efficiency of local authorities.
No Scottish local authority has faced sanctions under sections 13 or 14 of the Local Government Act 1988, which permits the issue by the Secretary of State of a written notice requiring an authority to justify any actions which he feels are anti-competitive, following which the Secretary of State may issue a direction to the authority preventing it from carrying out all or part of the work concerned or stating particular conditions which must be fulfilled before it has the power to carry out the work. Once again, because of Conservative Members' hostility to Labour-controlled English authorities, a Bill is being introduced that is not relevant to Scottish authorities.
Hon. Members have mentioned the commission for local government but they have got that slightly wrong. The commission is for England, not for Scotland. The Secretary of State for Scotland was asked to explain that some months ago in the Scottish Grand Committee and replied that Scotland was small enough for the commission not to be required. That is an extraordinary attitude. The Secretary of State for Scotland will define anti-competitive behaviour. He is a bit like the queen in "Alice in Wonderland": he defines it and imposes his will.
Last Saturday night, the four leaders of the main political parties in Scotland debated constitutional issues at Usher hall in Edinburgh. The Secretary of State was pressed by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about his plans for Scotland's constitutional future. The right hon. Gentleman was coy and refused to answer—perhaps because one of the plans was that he will define what is meant by anti-competitive behaviour. He knows that the Bill is not wanted or needed in Scotland and that the majority of Scottish people oppose it.
Despite the Government's hostility, local authorities have succeeded in winning the majority of in-house contracts. The Government want such nice little earners to go to their chums in the private sector. I wonder where it will end. I sometimes suspect that some more extreme Conservative Members will put the monarchy out to tender; if so, I think that the Fyfes may be able to undercut the Windsors! Conservative Members have said how popular the Bill will be, but none of them tried to pretend that it is wanted in Scotland.
It appears that the Scottish national party failed to express a desire to speak in this debate. I am unaware of it expressing a desire to take part in the Committee. It turned down the opportunity to serve on the council tax Bill. Scottish nationalists are often absent from debates and votes on what they call United Kingdom Bills but which seriously affect people living in Scottish constituencies. They have been challenged about their poor work rate for their salaries, but have excused themselves on the ground that they are doing other things in Scotland. Some of us think that more effort is required. Hon. Members can deal with their constituents' needs, campaign for what they believe in, and do their job in here to earn their salaries. We do not think that Scottish nationalists should try to get away with such excuses.
They can talk up a good fight. It is very easy to tell supporters how much one disagrees with the Government, but it requires more effort to be in here, challenging the Government and demanding answers. That is what we shall do in Committee.

Mr. David Wilshire: No Session, even a short one, is complete without a local government Bill. I am glad that this Bill has been introduced because it is the most important Bill to come before the House for 20 years. It is more important than the flagship Local Government Finance Bill that is being scuttled at the breakers' yard. Indeed, it is more important than the salvage tug Local Government Finance Bill that was recently before the House. It is more important than any local government finance Bill that the Opposition might dream up should they unfortunately be governing the country after the next election. If we are to make sense of the Bill and to understand its importance, we must think through why it seems like that to so many of us. The answer is that the structure of local government is the key to success.
Structure is far more significant for success—or for anything else—than finance, a point which seems to have escaped the hon. Member for Dagenham (Mr. Gould) who, in his opening remarks this afternoon, said that structure follows function. Indeed, his comments were echoed by the hon. Member for Bristol, South (Ms. Primarolo), who said that before one decides structure, one must decide what local government is going to do. I want to show how such sentiments are fatally flawed and, indeed, how such sentiments got us into this mess in the first place.
The Bill seeks to put right the errors of the Local Government Act 1972. It has been suggested that that Act was all about my party, but we have heard two comments from the Opposition which show that if they were in control they would still make the mistakes of 1972.
However, the Bill is not only about the aberrations of Avon and Cleveland. It is not even about the gratuitous insults to some of our historic cities. It is about the whole concept of two-tier local government. When I intervened, I said that I was implacably opposed to two-tier local government, although I would defend the rights of people who believe that it is better for them.
Two-tier local government flies in the face of how people feel about themselves, of how society instinctively organises itself and of how clients and consumers think about the services that they need. Therefore, the key to getting local government structure right is to understand the true nature of the communities to which people think that they belong.
Those communities are not defined by the cost of service delivery, which is why the Opposition are wrong to say that we keep focusing on cost. Cost is not the bottom line when defining natural communities. Of course, that might be true of services, but that is a different issue. Getting structure right is not about defining areas according to managerial convenience but about something fundamentally different. The good news is that, if we can get our structures right, basing them on the correct criteria, local government will flourish.
However, the bad news—especially for my colleagues who say that all one needs to do is to get the community right and all will be well—is that we all belong to many different types of communities. The right hon. Member for Halton (Mr. Oakes) said that when he praised the virtues of the historic counties. Of course we feel strongly about our historic and cultural background, but that has nothing to do with service delivery. If one is proud to belong to Lancashire and one lives in the north of it, one would not

dream of sending a child to school in the south of it. One's longing to be back in Lancashire is entirely different. Therefore, the bad news is that if we search for natural communities and think that there is just one such community and that if we could find it all would be well, it would be a search for fool's gold.
If we are to put structures right, we must be absolutely clear why successive Governments—and I stress the word "successive"—keep getting it wrong. I believe that the reason is that successive Governments have failed to think through the simple idea of who owns local government. Some people say that local people own it, and I have heard several hon. Members say that today. Other people will say that central Government own it. I think that one or two Conservatives say that out loud sometimes. Because of those two ideas—that local people or central Government own it—there will be problems, which is exactly what we are experiencing now. If only there were a simple answer, we would not be discussing the issue again.
The reality is that both local people and central Government own local government. Local government has a dual nature, and unless we embody that dual nature in its structure we shall continue to flounder and argue with one another and we shall not make progress.
What do we mean when we say that local government belongs to the people? In those circumstances, it is about meeting people's needs. When people say that they own local government, they want it to meet their needs within areas in which they are prepared to move. However, when we talk about local government belonging to or being created by central Government, that is entirely different. We are talking about just one of a range of vehicles for the local delivery of national services. Local government is just one of many, alongside quangos, central Government and the voluntary and private sectors.
The dual nature arises for a key reason, which is that the needs of the people and the services that are provided to meet them are fundamentally different, and the failure to grasp that fact has got us into this mess. The failure to grasp the fact that needs and services are different led to the 1972 Act and will again lead to mistakes if we continue to organise our structures on the basis of service requirements.
Another issue that we need to think through is why it is so easy to get into this mess in the first place. I think it is because the needs to which I have referred and the services which meet them are territorial. Needs have territories: people expect to go to school in a particular area and to do their shopping in a particular area. Services are territorial: that is how they are organised and managed. For that reason, it is very tempting for those who design them to say, "Wouldn't it be neat and tidy if we could make the same territory cover both needs and services?"
However, the truth is that, except in places such as the Scilly Isles and the Isle of Wight, needs territories and service territories rarely coincide. For example, a district general hospital almost always serves several local communities, but most individual local communities have more than one general practitioner's practice area within it.
It is important to notice that such examples which easily come to mind are outside local government. That is because people outside local government instinctively seem to understand that one designs service delivery according to the requirements of the service, not according


to the geography of the communities. For example, electricity companies organise themselves according to where their wires go, and water companies organise themselves according to where their pipes go, so why in heaven's name should anyone argue that fire services and libraries need the same territories? They do not—they need their own. They are nothing to do with needs but everything to do with services.
Whenever I say such things—especially when members of the Opposition have bothered to turn up and join in the debate—I am criticised. Indeed, throughout these debates my colleagues will run into flak not only from the Opposition, but from councillors of all political persuasions and also from a fair number of officers. I say to such people who shrug their shoulders and say that this is nonsense that I should take such criticism far more seriously if it came from an organisation called local government which people liked a great deal more than they seem to.
At the moment local government, despite its protestations, is not held in high regard by the public. One has only to consider the turnout at local elections and the comments that people make about the quality and cost of services to realise that. If I listen long enough—and I spend a great deal of time listening—I hear three themes. The first is that all the talk about such changes is impractical. The second—and we have heard it this afternoon—is that such changes weaken accountability. The third is that the changes undermine local government itself. The claim that the changes are impractical does not bear close examination. I accept that having many different territories is not neat and tidy, but the real world is not neat and tidy, unfortunately for us. I accept that having many different territories means many different arrangements for the delivery of services, but that is the real world as well.
The health service organises itself in its own way and the lawyers organise themselves in a different way. The retail sector, with its grocery shops and other shops, organises itself differently. The whole world of service delivery is different outside local government. We must stop trying to be neat and tidy just because we seek a local government solution that looks nice on the map.
To say that community X is too small to provide its own schools is to repeat the mistake of 1972. It confuses the needs of people with the services that meet them. School territories—deciding how big an area one wants to run schools economically, efficiently and effectively—is a service argument. Children needing education live in communities, whether we like it or not, and they expect to go to school in those communities. They do not expect to be told by county hall or by Whitehall what is convenient for the service.
It is claimed that all my arguments undermine accountability. We heard that argument from the hon. Member for Bristol, South (Ms. Primarolo), who kept saying that we need accountable local government. We heard it from the hon. Member for Newham, North-West (Mr. Banks), who spoke about the situation in London. He asked how on earth joint authorities could be accountable. I now live much of my life in London, and I have noticed that fires are still put out. A joint fire authority seems to function perfectly well. I have news for the hon. Gentleman. If I called the fire brigade and it did not come, I would not fret about which councillor or

which council was responsible. I should go down to the fire station, talk to the fire fighters and hold them accountable. That is the nature of accountability.

Mr. Blunkett: The hon. Gentleman would do what?

Mr. Wilshire: Does the hon. Gentleman want to intervene to challenge me? Obviously not.
Accountability is not in the ownership of democracy and it is utter nonsense to say that it is. Hon. Members should try telling that to a shop assistant who has sold faulty goods. He or she understands what accountability is about and does not need local government to explain it. Hon. Members should try telling that to a youth club leader when a member of that club has been involved in an accident. The youth club leader understands that he or she does not need local government to worry about that accident. Hon. Members should try telling anybody outside local government, "You cannot be held accountable unless the local democratic process is involved."
Accountability flows directly from the person who provides the service to the person who uses it. It does not go via a third party, whether that third party is elected or not. When I go into a shop, when I go to see a doctor or when I use any other service, I expect the people who are providing it, not some magical person way out in the distance, to be accountable. That is the true nature of accountability.
The reason why accountability gets muddled up is that those in local government who keep arguing about accountability are really talking about power. They are asking what they are accountable for—what they have power and control over. They overlook the other side of accountability, which is to ask who they have duties to. Those duties are to those whom they represent. Those duties are to ensure that all needs are met. If only those who argue about power and control and about local government having to have an oar in something would focus on duties, they would broaden the horizon of councillors to include the provision of all services and the meeting of all needs, not only those of which they can get control.
Another theme is that the Bill somehow undermines local government itself. The Bill touches on all the points that I have mentioned. The people who talk like that, who say that services should not be taken away from them and that they need them under their control, say, "Do not force us to seek tenders because there is something mystical about the way in which we do things. Do not publish nasty facts about us because it might undermine public confidence in local government." Such people, who are not confined to one party, seem to say, "Just remove a tier of local government and then go away."
The Association of County Councils would abolish the Association of District Councils, and the ADC would abolish the ACC. Our mailbags are full of that. The trouble with both arguments is that we are considering boundaries, structures and organisations which were two-tier solutions, and it is the two-tier solution itself that is wrong. We need to go back to the drawing board, and we need to become involved in those issues. That is why I welcome the Bill.
The Bill repairs the damage done in 1972. It gives us a chance to get the structures of local government right and it will enable us, if we do get them right, to get local


government closer to the people. The Bill will broaden the horizons of local government so that it concerns itself with all services, and it will switch the focus of local government away from power and control to meeting the needs of local people. If that is right—and I believe that it is—the Bill is vital. It offers us an opportunity to improve local government, to improve local services, and to meet more needs of local people. If we get it right, the result will be a new, respected and secure role for local government in the long term. Such a prize deserves more than party bickering; it deserves the support of everyone in the House.

Mr. Ian McCartney: I apologise to you, Madam Deputy Speaker, and to all hon. Members for my failure to attend earlier. I assure the House that I have not been dragooned in here by people behind the Chair. I have been sitting as a member of the Select Committee on Social Services considering the role of pension funds and especially that of Mirror Group Newspapers. A discussion that should have taken an hour lasted two and a half hours. I hope to make up in Committee for my late arrival; I say that to cheer up the Minister of State.
I am an adviser to the Greater Manchester fire authority, and before I was elected to the House and for a short time afterwards I was a member of the fire and civil defence authority and the Labour party's spokesperson on that body. Since coming to the House, I have maintained an interest in the fire service as an integral part of local government services.
In England and Wales, there are 64 brigades and all of them are concerned about the consequences of the Bill for the provision of in-house services by fire brigades, it is important to make it clear that every hour fire fighters put their lives at risk—sometimes in a futile effort—to protect the lives of individuals in their community. It is vital that the way in which we deliver the fire service and in which equipment is delivered at the point where it is needed is professional and protects the fire fighters in their role in the community.
It is dangerous enough to be a fire fighter on every occasion when the bell goes in the station. It is essential that equipment, such as turntable ladders, extinguishers providing foam and other fire-fighting materials, is provided and maintained to a professional standard which meets the requirements and safety regulations for the fire fighter and for those who, unfortunately, require the use of the service to protect property, lives or, in most instances, both.
The uniqueness of the fire service led to the exemptions in the Local Government Act 1988. It was in 1988 that the Government made their first ideological stab by taking away effective control of many services from local authorities. The hon. Member for Bournemouth. East (Mr. Atkinson) encapsulated the ideological view of Conservative Members when he said that the bottom line was value for money. The fire service is not just about value for money as one cannot give a life a price—whether that life is the one saved or the one being put at risk as a fireman tries to save another life from fire, smoke, dangerous hazards such as chemicals or bombings.
Hon. Members, Treasury spokesmen and Opposition spokesmen offer plaudits on the work of the tire service, but in this legislation the Government are prepared to put political ideology before the necessity of constantly maintaining the equipment that protects those who put their lives at risk to save others. That is why the Bill is so unacceptable. It is not just an ideological attempt to undermine other local government services. It is one thing to sit in a local authority office dealing with housing problems, but it is quite another matter when a fireman is 30 ft up a turntable ladder in a temperature of 1,000 deg C trying to save people or at least ensure that the bodies of loved ones are brought out and given decent burials. Those are the realities on the front line of the fire service.
The Local Government Act 1988 recognised three factors—first, the uniqueness of the vehicles provided for the fire service; secondly, the high standards that must be maintained due to the statutory duties imposed by the Home Office. It is interesting that no Home Office Minister is present this evening. The Home Office is responsible for the current review of fire services as they are affected by compulsory tendering, but during the Bill's passage no Minister is available to answer questions or take note of the issues rightly raised by the fire services during the so-called period of consultation.
Thirdly, there is a statutory requirement to maintain the hydraulic pumping and mechanical equipment to a high enough standard to meet the other statutory obligations of reaching a fire within a specific time, maintaining certain levels and types of equipment at all times and ensuring that it is in working order. However, the Government say that, since 1988, there have been developments in commercial vehicle maintenance that overcome the special needs of maintaining fire service vehicles. Will the Minister list the developments, who prepared them and say what report on them is available to the Home Office or the Secretary of State for the Environment? My contacts in the fire service, which are widespread and include those in fire brigades in Labour-controlled and Conservative-controlled local authorities as well as in those with no overall control, all state clearly that they do not know of any of the so-called revolutionary developments. The reality is that such developments do not exist. The truth is that the Minister of State is showing his zeal to maintain the momentum towards compulsory competitive tendering in all sectors of local government services, including the fire service, which provides unique services to the community.
In the debate in another place Viscount Mersey encapsulated the view of all right-thinking people on the Government's position. He would normally be expected to support the Government but he said:
Fire Brigades are unique. They are required by law to be at an accident within a specific time. Fire Brigades have their own highly specialised capital intensive workshops which have a faultless track record and which I believe no private competitor could hope to match. Even if they did manage to match it, there would be a learning period in which the Government would literally be putting people's lives at risk whilst the private contractor learned a new craft of fire engine maintenance.
A supporter of the Government made the grave charge that, in relation to the Bill, the Government's ideology would put people's lives at risk. In the light of such charges, the professionalism of the fire fighters in the


United Kingdom and the advice that the Home Office is already receiving, I hope that the Minister will state clearly that the fire service will be exempt from the proposals.
I wish to put several questions to the Minister and if he cannot answer them all this evening perhaps he will do so in writing after he has had consultations with his Home Office counterparts. If not, perhaps he will give detailed answers at a later stage of the Bill's passage. It is quite clear that there is a serious risk that a contract could cease operation for financial or commercial reasons such as bankruptcy or takeovers. That would leave a fire brigade with serious difficulties in maintaining its 24-hour, 365-day emergency cover.
It would be incredible if competitive tendering meant that the very basis of maintaining a high standard of care of vehicles and other life-saving equipment was put at risk by bankruptcy, impending bankruptcy or other financial difficulties within the commercial enterprise that was operating the support services for the fire brigade. Surely such circumstances should not be contemplated. To say that they would never arise is nonsense. We all know of the present huge number of bankruptcies—there are almost 1,000 a week in the current recession in the United Kingdom. In my district, the north-west, more than 120 companies go bust every week. Who is to say that those firms going bankrupt are not the ones that provide the life-saving back-up facilities for organisations such as the fire brigade? For that reason alone, never mind all the others, the Government should cease promoting the policy of contracting out such an important life-saving service.
There will be conflicts of priority between brigade emergency vehicles and commercial customers. If an organisation is involved in the preparation of materials for the fire service, unless there is an overriding guarantee to cover all circumstances, fire brigade vehicles and equipment could be put to the bottom of the list of priorities in that workshop. That would undermine the maintenance of the 24-hour service—a statutory requirement laid down by the Home Office. There must be day-to-day monitoring of work and changes to agreed contractual arrangments. Unless such monitoring takes place on the spot by fire service personnel there will be no guarantee that a fire tender or fire-fighting equipment will not break down. Such break-downs normally occur at the scene of an incident and put at risk the chances of rescuing people from buildings. They even place fire fighters' lives at risk. That is unacceptable.
On-the-spot judgments about the professionalism of fire fighters and the quality of care of the vehicles and equipment must he taken by the chief fire officers of fire brigades. That will happen only if he controls the day-to-day operation and discipline—it is a disciplined, uniform service.
I shall submit in writing to the Minister of State my worries on matters relating to the expertise of outside contractors, contractors' responses in relation to emergency services and the immobilisation of fire brigade equipment and materials that are necessary, particularly when fire brigades are asked to respond to major accidents, whether motorway pile-ups, bombings or other incidents. It is vital that we have clear guidance from the Minister or from the Home Office about the requirements for competitive tenders in respect of outside organisations, to ensure the maintenance of emergency cover in the face of emergencies experienced by fire brigades daily. When such emergencies occur, the complete mobilisation of all a

brigade's resources will be required. That cannot be guaranteed unless workshops are under the direct control of a fire authority and, in particular, of the chief fire officer.
For those and other reasons, I hope that the Minister will provide some guidance tonight. Will the Government continue the folly of putting fire services at risk of competitive tendering? Does the review being carried out by the Home Office reveal opposition from the fire services and, in particular, from chief fire officers? If so, will the Government withdraw such competitive tendering proposals for fire brigades?
The Government must listen to their professional advisers, the chief fire officers. They are responsible to the Home Office by law. They must provide advice about the fire services. No Conservative Member would disagree that the chief fire officers in Britain are part of the most dedicated and professional fire service in Europe.
The Bill must not undermine the capability of Britain's fire services to maintain and save lives from the point of view of those affected by fire and, as importantly, from the point of view of fire fighters who daily try to save other people's lives without thinking of their own. The Bill attempts to put a price on life, but it is impossible to do that.

9 pm

Mr. Anthony Nelson: The House has listened with interest to the forceful speech made by the hon. Member for Makerfield (Mr. McCartney) and to his impassioned plea for adequate provision for emergency and essential services. No one would disagree with him about that. However, we must recognise that all services, no matter how life saving and essential they may be, cannot be provided without regard to cost. Cost is an essential part of both parts of the Bill, which I welcome.
With regard to part I and compulsory competitive tendering, Opposition Members failed to differentiate between compulsory contracting out and compulsory competitive tendering. We are talking not about compulsory contracting out of services provided by local government but about the right, on an equal and fair basis, for private provision to be assessed in conjunction with direct labour organisations. That is wholly proper and in the interests of community charge payers. As trustees of the public purse, we should welcome that tonight.
The hon. Member for Dagenham (Mr. Gould) mounted an attack on my right hon. Friend the Secretary of State for the Environment. He seemed to accuse my right hon. Friend of having little knowledge of local government, of not being prepared to go far enough in his proposals and of not being prepared to embark on radical change of local government in a way, supposedly, the Labour party would. I can think of few people to whom such criticisms should be less directed than my right hon. Friend the Secretary of State for the Environment. My right hon. Friend introduced the housing legislation that gave council tenants the right to buy their own homes. He grasped the difficult political nettle of abolishing the community charge and replacing it with the new council tax. He introduced the present Bill. Over a decade or more, he has presided over major reforms of local government of which this Bill is the latest and the most welcome.
While I welcome the provisions relating to the powers of the Audit Commission and compulsory competitive tendering, I want to consider part II which relates to the


structure of local government. My constituency of Chichester is in the county of West Sussex and we are well served by Conservative-controlled district and county councils. It is difficult for me to advance a strong case for radical change in the structure of that system of local government when it is providing such good services on an accountable and low-cost basis to my constituents. I hope that the local government commission will recognise that.
We are considering a Bill which is necessary for several reasons. First, there has been a radical change in the system of local government finance. As my right hon. Friend the Secretary of State has said, we cannot consider finance separately from structure. Also, several of local government's responsibilities have changed—for example, in education, in community care and housing. It is appropriate now to consider whether a new structure is called for. Much has also been said about Avon and Humberside, where the need for change may be more apparent.
My right hon. Friend the Member for Selby (Mr. Alison) said that he hopes that we will be able to retain in some parts of the country a structure which has served communities well and which reflects the distinctive nature particularly of large disparate rural communities. There are large rural areas which do not have one predominant conurbation in their midst. The existing structures of some district services and some county services have worked well.
I have one criterion in considering the reform of local government—whether it will deliver to my constituents cheaper or better-quality services. Unless it can be shown beyond doubt that the services that my constituents receive will be of better value, involve a wider choice, or be of a better quality, I do not see the case for a radical, traumatic and costly upheaval in local government. My constituents are entitled to ask, "What is in it for us?" If the answer is that there is not a great deal in reform for them, there is no point in embarking on change for the sake of change.
In the remit of the local government commission and the guidance that has already been issued and which is the subject of consultation, the Government go a long way to relieving some of our concerns, because they lay emphasis not only on the cost of services provided but, first and foremost, on the community identity of local councils. They state a preference for unitary authorities, but, at the same time, they recognise that different structures may be appropriate in different parts of the country.
We in West Sussex believe that we have an exemplary Conservative-controlled county council whose spending last year was 8 per cent. below the standard spending assessment. This year, its spending will be 7 per cent. below the standard spending assessment. Our county council has no debt whatsoever, and therefore no financing charges to bear. As a result of the prudence of Conservative-controlled county and district councils, we pay £58 per head less than we would otherwise have to pay. That is a real dividend in my constituents' pockets. At the same time, a range of services has been improved. On education in particular, The Times lists us as having the third best examination results in the country.
Not only at county level but at district level, that success is reflected in Conservative management. In the Chichester division, for example, we have been able to

provide increased housing enablement facilities and improved environmental protection and litter and dog control, yet we have been able to do that by budgeting at or below the standard spending assessment.

Mr. Bellotti: Will the hon. Gentleman give way?

Mr. Nelson: I shall not give way because of the time.
The cost to my constituents in terms of the average community charge is £170. I advise the hon. Member for Eastbourne (Mr. Bellotti) to go down the road to the district of Adur where, for similar services in a similar area, people pay £266. That is the difference between Liberal and Conservative control in Sussex—£192 for a couple.

Mr. Bellotti: Will the hon. Gentleman give way?

Mr. Nelson: I have no time. With regret, I cannot give way to the hon. Gentleman on this occasion.
Local authorities should not indulge in a dog-eat-dog attitude. We should not put on their employees a blight of uncertainty pending local government reform. I hope that, as soon as possible, the local government commission will spell out to local authorities and to the Secretary of State areas such as West Sussex in which no change may be preferable to radical reform. However, in other parts of the country, change is much needed and there is no reason why we should adopt the same pattern nationwide.
I hope and believe that the local government commission will serve a real purpose in bringing forward reform which is now overdue, which is in line with Conservative party policies, and which will deliver value for money and improve the quality of services—the hallmarks of good Conservative control. The Bill sets that process on its way, and I congratulate the Government on introducing it.

Mr. Terry Rooney (Bradford, North: I speak as someone who until last May served as a councillor in a metropolitan district. As such, I must be one of the few hon. Members who has seen the practical effects of the implementation of legislation such as this, and not simply the ideology behind it.
The council that I had the honour to serve was Bradford which, from October 1988, suffered thea so-called "people's revolution". That was the authority that caused so much scandal as a result of the compulsory competitive tendering legislation with such iniquitous dealings in the management buy-outs of the school meals service that the Audit Commission had to issue special guidelines for all future cases. Against all advice and costings, the Conservative council awarded the catering contract for Bradford's theatres to an outside company that was even more expensive than the in-house team. After three months, the contract had to be cancelled. The Conservative authority also awarded the contract for vehicle maintenance to a company which, because of its failure to perform, was already in litigation with our neighbouring council. Those are some of the practical effects of compulsory competitive tendering in which ideology takes the place of practicality and common sense.
The Bill refers to the requirement to publish certain types of information. Perhaps we should consider publishing details of the many failures in Conservative councils throughout the country, and not least in the


borough in which this House is situated which, while exporting its homeless to other authorities, appears to be guilty of the illegal sale of houses that were not its to sell in the first place. Perhaps we should consider giving widespread publicity to the Audit Commission's account of the Government's failings. That could be done by means of a supplement to the citizens charter and could be delivered to every household in the country. There have been reports on poll tax collection, care in the community, housing benefit administration, the cost of providing bed-and-breakfast accommodation, and into the incredible disgrace of the state of school buildings throughout the country—not forgetting, of course, the report that praised the cost-effectiveness of direct labour organisations, contrary to the thrust of Government legislation.
Omissions from the Bill are perhaps as significant as its contents. The legislation takes no account of the expense that is incurred when a council puts work out to tender. It costs thousands of pounds to draw up the documentation. People put together their bids only to find that the work invariably stays with the in-house team. I am no great lover or defender of the legal profession. Since the admirable legislation relating to guardians ad litem was enacted, and since the passing of the Children Act 1989, social services work has involved much extra legal work. The going rate for solicitors in Bradford to work on such legislation is about £60 per hour, whereas the in-house price is about £14 per hour. However, as a result of this legislation, somebody will no doubt have to go to the expense of drawing up tenders and specifications and of sending them out. In the end, all that expense will probably be wasted.
The failure to recognise the difference between public concern about standards and public concern about price is what makes the Bill deficient. If cost alone is to determine the level of service that is provided, we shall no doubt see Ministers trading in their Jaguars for Ladas——

Mr. McCartney: Or Trabants.

Mr. Rooney: Yes, or Trabants.
In Yorkshire, we have an expression, "You don't get owt for nowt." Unfortunately, there is a price to pay for everything and, under this Government, that price is measured by what we call the poll tax and will soon no doubt be measured by the council tax.
If we had stuck with the fair rates policy the vast majority of people in Britain might have been able to bear that price and public services would remain public services, not sacrificial lambs on the altar of the ideology of the Conservative party. As with a similar Bill that was around at about this time in 1987, this Bill is the product of the Government's imagination. At the election it will undoubtedly turn into a nightmare for them.

Mr. Robert G. Hughes (Harrow, West): In view of the shortage of time, my speech will be rather more in note form than I intended, but I hope that the points that I make will be clear. I join in the general welcome for the Bill among Conservative Members. When examining the structure of local government and establishing the local government commission, one could not make any better start than the appointment of Sir John Banham as the chairman of the commission if one wants common sense, quality decision making and a tough-minded approach.
There is a strong feeling, certainly among Conservatives in local government, that we need to appoint people with direct local government experience to the commission. That has been reflected among Conservatives in Parliament to some extent. When that aim is interpreted, or at least when it comes out of the other end of the machine, it results in the odd ex-chief executive being appointed. That is not what I mean. Of course, there is a place for one or two chief executives, but I can think of several names, which I will not mention, of former Labour and Conservative council leaders who could make an enormous contribution. I hope that some of those names will be borne in mind by my hon. Friend the Minister.
I have a preference, and a preference is shown in the spirit of the Bill, for unitary authorities. Let us make one comparison. If West Yorkshire can manage without a county council and manage well, and the West Yorkshire district councils can carry out the necessary functions, why does Derbyshire have to be encumbered with a county council? There is a strong feeling in Derbyshire that the county council is an encumbrance and that the sooner that it goes, the better. However, I do not intend to get embroiled in the arguments between the districts and the counties. If I do, I may find myself kebabed between the two. They can sort out their own arguments.
My right hon. Friend the Secretary of State was right about the public relations campaigns being run by the counties and districts. They are a complete waste of taxpayers' and charge payers' money. The councils should understand that the campaigns will have no effect. Even Humberside county council is launching a campaign to show the people that they have been wrong all these years and should have loved it. Some campaigns are doomed to failure from the start and that one will certainly be a waste of time.
The question to be asked is how the popularity of the final proposals is to be tested. We should not go so far as to hold a referendum, but the people must have the final say.
I wish to say a few words about what measures we would be considering if we had the misfortune to have a Labour Government. Rather than moving towards unitary authorities we would be considering the re-establishment of the Greater London council—a new, larger and uglier version. One would not think that that was Labour's intention from reading the document "London United" issued by the Labour party, but one would know it from reading the draft of that document which the Labour party did not dare publish. If it had published the full document as originally written, we would know that there are some real nasties in it.
For example, housing strategy would go to the GLC. The hon. Member for Carlisle (Mr. Martlew) rightly told us that it would be impossible for a county council to run housing strategy. Yet that is what the Labour party promises for the new GLC. It wants to give tourism back to the GLC, yet the only contribution that the GLC made to tourism was to destabilise and almost destroy the London tourist board.
Despite the GLC's lack of success with London buses and the London underground, the Labour party wants to give back to the GLC not only the buses and the underground but Network SouthEast. That would not go down well with my constituents or with many people in the south-east of England.
To crown it all, it is people like the extremists—in some cases, frankly, nut cases—who run some Labour authorities in London that the Labour party wants to see running London's police. The Labour party's draft document, which it did not dare to publish, refers to London policing functions. No wonder the party did not dare publish that document.
The Audit Commission must be free to cause discomfort. Of course it says things that are uncomfortable for the Government and for local authorities. Howard Davies has done a very good job there. I wonder how long he would last in the emasculated Audit Commission about which the Labour party has talked. The Labour party has form in standing up for secrecy in local government, in opposing the publication of school results or of any other kind of league table. That is why the party opposes this part of the Bill. Its approach to cost comparisons is to say that they are not fair, whereas the Conservative approach is to ask, "How can we do better? How can we provide a better service?"
The hon. Member for Dagenham (Mr. Gould), in a half sentence that he perhaps did not mean to utter, let the cat out of the bag. He said that the real problem was a failure of local government funding. In other words, like all of his Labour colleagues, he is promising paradise when he should be talking about priorities. Labour makes promises: a new council house building programme, more money for community care, more money for roads and pavements, more for teachers, better schools, extra equipment, new capital expenditure, leisure centres and sports facilities—and all of this to be funded without a general increase in taxation.
Labour's deputy leader has been saying to the councils, "You may not get as much as you want, but you will certainly get more." This is a deeply cynical exercise in uncosted but attractive promises. It is not so much a programme to improve services as a Labour gimmick to gain votes.

Mr. David Blunkett: The hon. Member for Harrow, West (Mr. Hughes) has just done a first-rate job on behalf of the Labour party. We congratulate him on spelling out the good things that we shall be offering. We also pledge that when we are drawing up the membership of the commission we shall take into account his earlier suggestions about widening the membership. We shall even consider him in whatever new role he has at the time.
If ever there was a wolf in sheep's clothing this Bill is it. It pretends to be about local government when it is nothing of the sort. It pretends to be in favour of the user, the customer, although it does not mention quality at all. That being the case, we are right to ask what the Bill's objectives really are. Clearly, they have nothing to do with extending local democracy or with bringing local government closer to the people or about accountability. They are not even about the accessibility of services, and they are certainly not about the development of economic and social policies—something that is so often ignored in the scramble to fragment and disintegrate what was built up over the last century by local government people of all political persuasions. It is certainly not about quality, and

it is not about service. The words "public service" are, and for the past 13 years have been, anathema to Conservative Members.
The content of the Bill, despite its presentation in this House and in another place as being innocuous, is, in fact, a reflection of the views of the No Turning Back group of Conservative Members. Unlike the council tax legislation, its provisions can be embraced with genuine enthusiasm by the Minister of State. Instead of having to stand on his head, he is runing hard and pushing his shoulder to the wheel because, of course, he is a member of the No Turning Back group. [HON. MEMBERS: "Hear, hear."] Hon. Members who are shouting "Hear, hear" indicate the support that the No Turning Back group commands in this debate and in the Conservative party. Members of the Conservative party were nurtured—nay, bottled—on the heady milk of Margaret Thatcher's version of Conservatism. The pamphlet "Choice and Responsibility", which was supported by the Minister of State, spelt it out. It said:
Local authorities, like central Government, should become enablers rather than providers … Compulsory competitive tendering should be progressively phased out and replaced by compulsory private tendering … Only public health, civil defence and local amenities need to remain an integral part of local government.
That is the agenda of the No Turning Back group. That is what it stands for and that is what the Bill embodies.
Part I, which deals with the tendering process, makes the values clear. Instead of what we would consider to be a reasonable programme for the provision of services, and an increase in control by local people over such provision by holding to account those whom they elect, we have the Conservative party slogans of privatise, centralise and neutralise. Cost, not quality, ideology not competence, delivery for profit rather than service for people—those are the slogans that we have had from this regime. Those who read the Bill, the comments in press releases and the local government commission's guidelines will be able to see that.
The Secretary of State talked about cost, economy, efficiency and effectiveness but not about quality or service. If the Conservative Government were serious about a genuine effort to reach a consensus about the way in which we should mirror what is taking place in the rest of Europe—east, central and west—and in the United States and Canada with the devolving and decentralisation of services, we should be happy to reach an agreement with them. What is needed is not compulsion or dictation from the centre but people working together in the best interests of their local community.
Interestingly, the message spelt out by the ideological right in the United States is rejected by the ideological right in Britain. While they both preach the supremacy of the market and the inalienable rights of the private sector, the Americans preach a pragmatism in the provision of local services. More importantly, they advocate removing the overwhelming power of the central state to dictate, and leaving states, counties and cities to decide matters for themselves. That message is being fought within the Republican party between Pat Buchanan and George Bush.
Here, we have a strange, enforced market economy. If a local authority wins a tender, the Government try to take it away. They invent strange reasons for doing so, saying that it has used anti-competitive practices. One cannot expect the Government to accept European Community


rules about the "economically advantageous" projects that should be accepted when any scheme goes out to private tender but one can expect consistency. Three times in the House of Lords spokesmen contradicted themselves when asked whether that phrase should be applied.
As my hon. Friend the Member for Dagenham (Mr. Gould) said, the spokesmen got themselves into an even bigger twist over the question whether cost should be the primary basis on which to judge a contract, or whether then to introduce another element so as to ensure that white collar services can be won by the private sector. In other words, they have an enveloping scheme under which there has to be a basic threshold over which people must pass before getting into the realms of simply accepting the lowest possible tender.
All of the contradiction comes because when the citizens charter was announced and the Prime Minister increased the costs of the Cabinet Office by £800,000 to pay for the work to be done on it, bringing the cost of the Cabinet Office to £22.5 million, it was announced that the PA consultancy report had been commissioned. At paragraph 1.4, the report states:
It can be argued (and indeed many of our case study authorities did argue) that, given the problems with the application of CCT in the corporate service sector described above and the current existence of strong pressures to reduce central costs (described in section 2), it is neither desirable nor necessary to extend CCT into this sector at all. There is some substance to that argument.
The PA report was supposed to justify the Government's programme and ensure that they could press ahead with what they wanted to do. Every professional body that had been consulted has rejected the programme and the proposals attaching to it. The winner of the Queen's gold award for the best architectural projects of the year, Mr. Stansfield Smith—for Hampshire county council schools as it happens, an authority that is proud of local provision by an in-house organisation—has described the programme as being as much about
cheap politics as about cheap buildings".
He referred also to cheap tendering. My right hon. and hon. Friends could not describe it any more succinctly than that.
The programme is intended to ensure that people can make profit out of public service rather than to achieve the goals that we see as important for ourselves. We, the Opposition, do not have only those who are in public service to support what we believe to be right. We have, for instance, the former comptroller of the Audit Commission, the new chairman of the local government commission, John Banham. At the conference of the Institute of Housing at Harrogate in 1985, Mr. Banham praised the authority of the city of which I had the privilege to be leader, describing it as the most efficient authority in Britain.

Mr. Portillo: He did not always do that.

Mr. Blunkett: I think that once was enough, Mr. Banham said that Sheffield was a shining example. He added—this is the importance of the statement—that privatisation was the last resort of a management which had given up. That is about the ticket.
There are local government officers who are engaged in management buy-outs and others who decide to work in the private sector and pretend that they can deliver services better while being paid more than in the public sector.

Alternatively, they can get some rewards from shareholdings. We have Whitewater Leisure, Contemporary Leisure and all the controversy about those who used to for the Glasgow authority. They go off and tell untruths about the organisations for which they are working—in fact, downright lies—or for which they worked. I shall say that outside the House if there is anyone who is worried about privilege.
The examples that I have given show that there is a fundamental myth, which is that public service is incompetent and that the private sector is always right. It is not always in the right and we know that it is not. We know, for instance, that 76 per cent. of the services that have been put out to tender have been won in-house despite the fact that in-house organisations cannot develop the capital investment and lease equipment in the same way as the private sector. Everything that they borrow has to be put against basic credit approvals. They are bound and gagged when it comes to extending services by engaging in competition with the private sector outside the local authority.
Some of us were interested to hear the Secretary of State espousing or advocating cross-boundary tendering. I say to the hon. Member for Harrow, West that I think that the right hon. Gentleman's words will have reached the chairman of the Audit Commission. They might even have reached the legal officer, Mr. Tony Child. If that has happened, his view will change overnight. I hope so, because it would be nice to integrate—to subsume—the Audit Commission, in an orderly fashion, into our quality commission. That would provide quality for people and ensure that league tables mean what they should mean, which is a comparison of the delivery of services to people. They should show, for example, how many home helps per thousand of the population are being provided. They should show up Tory authorities for not providing nursery provision. It is 20 years since the previous Prime Minister, when she was Secretary of State for Education, promised universal nursery education for all three to five-year-olds whose parents desired it. Promises fulfilled—people standing on their heads by the dozen.
I shall cite one league table comparison that might be worth considering. Earlier today the Secretary of State chided me and said that in some way I was an advocate of his system because I used the example of refuse collection and its cost to show that his system was simple and that we were in agreement on it. He should ask Chiltern, the Buckinghamshire district that I quoted, and whose refuse collection costs a great deal, why that should be so. It is because collecting the refuse of houses in close proximity, such as terraced houses in the city of Sheffield, costs only one third of what it costs to collect the refuse of houses in the posh south-west of Sheffield, where the houses are spaced out and the collection men have to walk up long drives. In Sheffield, householders do not have to carry refuse to the end of their drives—how do we construct league tables to reflect that?
Conservative Members might like to think about the league table that I am about to cite. The Secretary of State for Education and Science is keen on people reading books. We are all keen on that. I am desperately in favour of my children learning to read books. What about the number of books issued? I am not referring to The Sunday Times cocked-up, distorted version, which CIPFA denounced after it had been printed. I shall give the figures for the number of library books issued per hundred of the


population across a sample of authorities. For Manchester, it is 537. Who controls Manchester? It is Labour. For Hammersmith and Fulham, the figure is 382; for Lewisham, 371; for Merton, 366; for Greenwich, 346; and for Islington, 345.
For Suffolk—a Tory authority—the figure is 129. It could manage only just over one book per person per year. For Berkshire, it is 134; for East Sussex, 149; for Cornwall, 153; and for West Sussex, 167. What a fantastically literate lot they are in Tory authorities. People talk about reading and about literacy, but they do not spend the money to enable people to achieve that. The Labour party believes in service and in spending money wisely on providing that service. We believe in a local government structure and a set of functions that enable that to happen.
The hon. Member for Spelthorne (Mr. Wilshire) found himself in an interesting ideological twist on whether function or structure came first. He denounced function as an irrelevance and said that we needed to set up a structure. Presumably, we could invent anything that we liked. Local government could meet in a telephone box because function is not important. However, we all know that it is important and that it is the driving force of structure. We need the right finance and the right structure, but above all we need the right objectives. We need to know what we are setting out and why. We need to know the principles behind what we are doing.
If we believe, and many of us do, in unitary local government—one door to knock on and one set of people to hold to account—we must give them something to do other than riding around in a civic car pretending that they are important and delivering nothing, responsive to no demands, not aspiring to change and improvement, and not even doing what the Conservatives of old did in the Chamberlain era when there was the sort of socialism that is now anathema to the Tory party. Instead, according to the Tory party, and as spelt out in the guidelines to the commission, we have a structure that accords with the aims of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He is ill, and I hope that he is now improving. In one of his speeches, the right hon. Gentleman spoke of a council that met once a year to put out contracts, had a good lunch and then went home. I am sure that all Conservative Members are in favour of a good lunch; but it simply will not do.
Let me spell out what the commission's report is supposed to do. The guidelines do not talk about developing a structure that is crucial to the quality delivery of services. This is what they say about housing:
Authorities also own arid manage 4 million houses nationally.
Referring to assessment and monitoring, the guidelines continue:
Their role in these areas of housing will be passed over to housing associations and the private sector.
They speak of opting out in the primary, secondary and further education sectors; as for social services, they speak of monitoring and enabling rather than providing. Every part of appendix A talks about disabling local government, rather than enabling it to perform.
We offer something very different. We offer a decent finance system that can sustain the functions that we give to local government, and a structure that is not piecemeal,

but is based on identifiable communities—that is geared not to numbers alone, but to the ability to provide a decent level of service.
What the Bill offers is not local, nor is it government. It is dictation from the centre; it is administration rather than government. What is not privatised will be centralised. All that the Bill contains, and the ideology behind it—the values and principles that it espouses—must be rejected tonight in favour of genuine local democracy, and a Labour Government who will implement real policies for the people whom we represent.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I thank the many Conservative Members who have spoken so well in support of the Bill. My hon. Friend the Member for Spelthorne (Mr. Wilshire), who is one of the most thoughtful Members of the House in this context, described it as historic. It is indeed historic, not because reforms of local government have not taken place before—they have done so often—but because it offers a reform of the structure of local government. That structure can now be diverse, based on local choices, and it can place tremendous emphasis on community identity. Different solutions can be adopted in different places, solutions that are suited to the different needs of different people. My hon. Friend the Member for Gloucester (Mr. French) was particularly strong on that point.
It struck me as extraordinary that the hon. Member for Dagenham (Mr. Gould) should attack us on that point. To him, the idea of different solutions in different places seemed untidy—chaotic, he said. It did not meet the socialist ideal of being able to impose the same solution from Whitehall on every part of England. It appears that, over the past 20 years, the hon. Gentleman has slept soundly. The Labour party has learnt nothing about the deep-seated wish of the British people for local government structures that reflect what they feel about their local communities, and units of government that mean something to them and are not imposed on them.

Mr. John Maxton: Will the Minister give way?

Mr. Portillo: I am sorry; I will not give way.
Something very funny must have happened to the hon. Member for Dagenham on his way to the Chamber. Last year, when the Government announced the proposals, Labour appeared to be in favour of the reform of local government structure and the establishment of a local government commission. The hon. Member for Dagenham must have been speaking out of turn at that time; he has certainly been nobbled since.
It may well be that the policy was agreed by the shadow Cabinet, but some chance remark made by the Leader of the Opposition at Luigi's restaurant threw the whole thing into disarray. The Labour party is certainly in opposition now. I am not sure whether I am more appalled at the prospect of the Labour party being in government than I am at the prospect of having the support of the hon. Member for Eastbourne (Mr. Bellotti) and the Liberal party.
Diversity is the point of the Bill. As my hon. Friend the Member for Reading, West (Sir A. Durant) said, backed up so eloquently by my right hon. Friend the Member for


Southend, West (Mr. Channon), we do not want this reform to result in lines being drawn on a map that will be imposed upon people. There is no need for a minimum size. There is no Whitehall model that could embrace the Isles of Scilly and the demands of Yorkshire. There is no reason, as the right hon. Member for Halton (Mr. Oakes) and the hon. Member for Eastbourne were concerned to know, to presume the need for joint authorities.
My right hon. Friend the Member for Southend, West asked me a number of specific questions. The chairman-designate of the local government commission, Sir John Banham, is in place. I hope that soon, bearing in mind what my hon. Friend the Member for Harrow, West (Mr. Hughes) said, we shall make more appointments to the shadow commission so that the commissioners can begin to plan their work in order that the commission can start its work shortly after Royal Assent. The Bill specifies a maximum of 15 commissioners. That number is enough to operate on a regional basis.
It should be possible for the local government commission to consider four or five different areas throughout England at any one time. The areas will differ in size. I believe that the smallest area that will be considered by the commission at any one time will be a county, with the possible exception of certain islands. However, as my right hon. Friend the Member for Southend, West said, it may be appropriate in some cases to consider a group of counties if clear cross-boundary issues are likely to arise during the discussion period.
The order in which we put the various parts of England under the local government commission's microscope will be for the Government to decide. It will take some years to complete that process, but that is a necessary price to pay for the flexibility that the legislation gives us. It enables us to tailor our solutions to suit the needs of different places.
We are predisposed towards unitary authorities. We believe that there are strong arguments in favour of unitary authorities. My hon. Friend the Member for Hyndburn (Mr. Hargreaves) spoke eloquently about them in general and about how they would apply in his particular case. When there are two tiers of local authority, people tend to become confused about who is doing what. Accountability suffers. People do not know which authority they are paying for particular services. It leads people to believe that there is excessive bureaucracy and overlap and the potential for waste. We do not want to be dogmatic. When he spoke about north Yorkshire, my right hon. Friend the Member for Selby (Mr. Alison) said that it would be unwise for any Government to impose the same pattern on every part of England because the differences between one part of the country and another are so great.
At the beginning of his speech the hon. Member for Dagenham said that no one disagrees with the Government's wish to introduce simplicity into local government, but the fact is that the Labour party profoundly disagrees with that wish. It wishes to impose an extra tier of regional government upon the country. It does not matter to the Labour party that the regions are unpopular, or that they cannot be afforded, or that they are unwanted. The Labour party still favours introducing another layer of government, imposing it upon the people of this country and raising taxes to pay for it.
What clearly are wanted are the links that people cherish with their traditional counties. Even if the units of government are not based upon the counties, people still

hark back to the links that they had with the traditional counties. They are still keen on those links. There is no reason why the traditional counties should not emerge as part of the process, even if they are counties that have no administrative functions in certain places. [Laughter.] The Opposition laugh at their peril. It matters very much indeed to the people of Wirral whether they live in Cheshire or Merseyside. It matters very much to the people of Coventry whether they live in Warwickshire or in the west midlands. My hon. Friend the Member for Bolton, West (Mr. Sackville) is in his place. It matters a lot to many people in Bolton whether they live in Manchester or Lancashire. Many of my constituents are deeply concerned about Middlesex.
To the people of England, it is more than a question of who administers local government: the lines on the map, the cricket teams, the Lords Lieutenants and signposts are important. To the Labour party, they are untidy matters, which is why it not only opposes these changes but laughs when they are mentioned.
The hon. Member for Dagenham wants not only to recreate a GLC but, as my hon. Friend the Member for Harrow, West said, for it to be bigger and for it to control the police, which the old GLC never did. He warned us that we would pay the price. He said that a Labour Government would create a new GLC. Labour will pay the price: there will be no Labour Government because of the London effect. Once again, we shall win marginal seats in Lambeth, Haringey, Lewisham and Waltham Forest, where people are fed up with Labour government. We shall win in Brent and Ealing, where we have already turfed out the Labour party, and marginal seats in Wandsworth and Westminster, where people have seen the benefits of Conservative government. The London effect will again work in favour of the Government. One has only to look around to see Labour government in action in London.
I appreciate the courtesy of the hon. Member for Linlithgow (Mr. Dalyell) in giving notice of the details that he wanted to raise. We shall address those points in Committee, and my hon. Friend the Under-Secretary and I will be happy to deal with them in correspondence. However, it would be unrealistic to do so in replying to the debate. We have sought evidence that the de minimis rule is inappropriate. In England, no such evidence has come forward, but it is for my right hon. Friend the Secretary of State for Scotland to decide whether he is convinced by the evidence.
The hon. Member for Linlithgow raised a number of other important issues that we shall want to consider in Committee and, I hope, in response to consultation.

Mr. Dalyell: Will there be a decision on de minimis fairly soon?

Mr. Portillo: That is a matter for my right hon. Friend the Secretary of State for Scotland, who will have noted the points that the hon. Gentleman made.
The hon. Member for Makerfield (Mr. McCartney) mentioned the fire service. I do not share his view that it is inappropriate for it to be excluded from compulsory competitive tendering. None the less, we are in a consultation period and the Home Secretary will want to take account of all the points that are made to him. As the hon. Gentleman said, the opinions of chief fire officers will obviously weigh with the Government.
There has been a change in the approach of local government to compulsory competitive tendering, but it appears to have been lost on the Labour party. Local government is anxious to provide better value, to improve management, and to seek competitive bids for many of the services that it provides. My hon. Friend the Under-Secretary and I received representations from local authorities about their standard spending assessments. Hardly a single Labour or Conservative-controlled authority failed to mention the strides that they are making in improving the competitiveness of services and in putting services out to competition.
The Labour party is almost alone in the world in questioning the benefits of competitive tendering. My hon. Friend the Member for Reading, West and my right hon. Friend the Member for Southend, West gave good examples of the way in which it is improving services. My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) made an eloquent speech about compulsory competitive tendering; and I was heartened by the fact that my hon. Friend the Member for Chichester (Mr. Nelson) also realised that we were talking not about compulsory contracting out but about compulsory competitive tendering, which means that there is an opportunity for the in-house team to make a bid.
Many local authorities have moved ahead and are putting many of their services out to competitive tender.
They are already investigating the scope for putting some
more services—management services, computer services and the collection of moneys—out to the private sector. In compulsory competitive tendering the Government are merely bringing up the rear and ensuring that local authorities that have not yet taken advantage of those techniques are brought up to the level of the best.
How the House will have valued yet another statement from the hon. Member for Dagenham, this one to the effect that he would do something only in extremis. On this occasion, he said that if he were Secretary of State he would introduce compulsory competitive tendering only in extremis. That is yet another case of the hon. Gentleman not being able to make up his mind about his policies and he must therefore reserve the right to do precisely what is Government policy.
I thought that my hon. Friend the Member for Bournemouth, East was extremely eloquent about the importance of levelling the playing field between the private and public sectors. There have been far too many cases of abuse in which local authorities have contrived a system of competitive tendering under which only the direct service organisation could win because special conditions were imposed. Those practices must be brought to an end, and I know that my hon. Friends will strongly support the Government when we say that enough is enough and that if we are to have a compulsory competitive tendering regime, it must be one under which the private and public sectors are able to compete with absolute equality.
The hon. Member for Dagenham said that the citizens charter had been ineffective, but how wrong he was. Here we are, just a few months after the announcement of the citizens charter, legislating to improve the services provided to citizens. We are already halfway through a Bill which is a major step forward in that respect, and it is

breath-taking nonsense for the hon. Gentlemen to suggest that Labour authorities were pioneers in the provision of better services to their constituents. We know that Labour authorities in London and throughout the country have become bywords for poor and expensive services, for litter-ridden streets, for badly-managed housing estates, for miserable conditions and for high levels of taxation.
The hon. Member for Sheffield, Brightside (Mr. Blunkett) raised the question of how much it cost to collect a tonne of rubbish in one place as opposed to another. It is expensive in Wandsworth because the streets are swept every day. I suspect that it would be cheaper to collect a tonne of rubbish in Lambeth on the basis of an annual sweep of the streets because, to pick up a tonne of rubbish there, one would hardly have to stir from the spot. That is the experience of many people living in Lambeth. We shall introduce a system of measurements so that people in different local authority areas will know precisely to what standard their local services are being provided.
The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) criticised the Government for not slavishly following the advice given by consultants. In this Government it is the Ministers who decide on policy, not the consultants. It gave us a good insight into a Labour Government. A Labour Government would bear the impression that the last consultant laid upon them. The Opposition have no philosophy of their own. Presumably, they would set out on one course of action, receive a consultants' report which would blow them off their course, the journalists would then be summoned to Luigi's restaurant and policy would once again be changed.
Labour is offering to people who are presently enjoying the benefits of compulsory competitive tendering a promise to scrap it. It offers to those who demand quality the abolition of the Audit Commission, something to which it is pledged. Labour offers to all those who want simpler local government a new tier of expensive regional government.
We offer higher quality services brought about by competition, we offer better information to the public about the standards of service which they will receive, and we offer to reform local government to reflect wishes and natural communities. For those reasons, I commend the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 276, Noes 221.

Division No. 43]
[10 pm


AYES


Adley, Robert
Bennett, Nicholas (Pembroke)


Alexander, Richard
Benyon, W.


Alison, Rt Hon Michael
Bevan, David Gilroy


Allason, Rupert
Biffen, Rt Hon John


Amery, Rt Hon Julian
Blackburn, Dr John G.


Amess, David
Blaker, Rt Hon Sir Peter


Amos, Alan
Body, Sir Richard


Arbuthnot, James
Boscawen, Hon Robert


Arnold, Jacques (Gravesham)
Boswell, Tim


Arnold, Sir Thomas
Bottomley, Peter


Ashby, David
Bottomley, Mrs Virginia


Aspinwall, Jack
Bowden, A. (Brighton K'pto'n)


Atkins, Robert
Bowden, Gerald (Dulwich)


Atkinson, David
Bowis, John


Baldry, Tony
Boyson, Rt Hon Dr Sir Rhodes


Banks, Robert (Harrogate)
Braine, Rt Hon Sir Bernard


Batiste, Spencer
Brazier, Julian


Bellingham, Henry
Bright, Graham


Bendall, Vivian
Brooke, Rt Hon Peter






Brown, Michael (Brigg &amp; Cl't's)
Hargreaves, Ken (Hyndburn)


Browne, John (Winchester)
Harris, David


Bruce, Ian (Dorset South)
Haselhurst, Alan


Buck, Sir Antony
Hawkins, Christopher


Burns, Simon
Hayes, Jerry


Burt, Alistair
Hayhoe, Rt Hon Sir Barney


Butler, Chris
Hayward, Robert


Carlisle, John, (Luton N)
Heathcoat-Amory, David


Carlisle, Kenneth (Lincoln)
Heseltine, Rt Hon Michael


Carrington, Matthew
Hicks, Mrs Maureen (Wolv' NE)


Carttiss, Michael
Higgins, Rt Hon Terence L.


Chalker, Rt Hon Mrs Lynda
Hill, James


Channon, Rt Hon Paul
Hind, Kenneth


Chapman, Sydney
Hogg, Hon Douglas (Gr'th'm)


Chope, Christopher
Hordern, Sir Peter


Churchill, Mr
Howarth, G. (Cannock &amp; B'wd)


Clark, Rt Hon Alan (Plymouth)
Howell, Rt Hon David (G'dford)


Clark, Dr Michael (Rochford)
Howell, Ralph (North Norfolk)


Clark, Rt Hon Sir William
Hughes, Robert G. (Harrow W)


Clarke, Rt Hon K. (Rushcliffe)
Hunt, Rt Hon David


Colvin, Michael
Hunter, Andrew


Coombs, Anthony (Wyre F'rest)
Irvine, Michael


Coombs, Simon (Swindon)
Irving, Sir Charles


Cope, Rt Hon Sir John
Jack, Michael


Couchman, James
Jackson, Robert


Cran, James
Janman, Tim


Currie, Mrs Edwina
Jessel, Toby


Curry, David
Johnson Smith, Sir Geoffrey


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Gwilym (Cardiff N)


Davis, David (Boothferry)
Jones, Robert B (Herts W)


Day, Stephen
Jopling, Rt Hon Michael


Devlin, Tim
Kellett-Bowman, Dame Elaine


Dickens, Geoffrey
Key, Robert


Dicks, Terry
Kilfedder, James


Dorrell, Stephen
King, Roger (B'ham N'thfield)


Douglas-Hamilton, Lord James
Knapman, Roger


Dover, Den
Knight, Greg (Derby North)


Dunn, Bob
Latham, Michael


Durant, Sir Anthony
Lee, John (Pendle)


Eggar, Tim
Lester, Jim (Broxtowe)


Evans, David (Welwyn Hatf'd)
Lightbown, David


Evennett, David
Lloyd, Sir Ian (Havant)


Farr, Sir John
Lyell, Rt Hon Sir Nicholas


Favell, Tony
MacGregor, Rt Hon John


Fenner, Dame Peggy
Maclean, David


Field, Barry (Isle of Wight)
McLoughlin, Patrick


Finsberg, Sir Geoffrey
Mans, Keith


Fishburn, John Dudley
Marshall, Sir Michael (Arundel)


Fookes, Dame Janet
Maude, Hon Francis


Forman, Nigel
Maxwell-Hyslop, Sir Robin


Forsyth, Michael (Stirling)
Meyer, Sir Anthony


Fowler, Rt Hon Sir Norman
Mills, Iain


Fox, Sir Marcus
Mitchell, Andrew (Gedling)


Franks, Cecil
Mitchell, Sir David


Freeman, Roger
Moate, Roger


French, Douglas
Monro, Sir Hector


Fry, Peter
Moore, Rt Hon John


Gale, Roger
Morrison, Sir Charles


Gardiner, Sir George
Morrison, Rt Hon Sir Peter


Gill, Christopher
Moss, Malcolm


Glyn, Dr Sir Alan
Moynihan, Hon Colin


Goodhart, Sir Philip
Neale, Sir Gerrard


Goodlad, Rt Hon Alastair
Nelson, Anthony


Goodson-Wickes, Dr Charles
Neubert, Sir Michael


Gorman, Mrs Teresa
Nicholls, Patrick


Grant, Sir Anthony (CambsSW)
Nicholson, David (Taunton)


Greenway, Harry (Ealing N)
Nicholson, Emma (Devon West)


Greenway, John (Ryedale)
Norris, Steve


Gregory, Conal
Onslow, Rt Hon Cranley


Griffiths, Peter (Portsmouth N) 
Oppenheim, Phillip


Grist, Ian
Page, Richard


Grylls, Sir Michael
Paice, James


Gummer, Rt Hon John Selwyn
Patnick, Irvine


Hague, William
Patten, Rt Hon Chris (Bath)


Hamilton, Rt Hon Archie
Patten, Rt Hon John


Hamilton, Neil (Tatton)
Pattie, Rt Hon Sir Geoffrey


Hampson, Dr Keith
Pawsey, James


Hanley, Jeremy
Peacock, Mrs Elizabeth


Hannam, Sir John
Porter, Barry (Wirral S)


Hargreaves, A. (B'ham H'll Gr')
Porter, David (Waveney)





Portillo, Michael
Taylor, Ian (Esher)


Powell, William (Corby)
Taylor, John M (Solihull)


Price, Sir David
Tebbit, Rt Hon Norman


Raison, Rt Hon Sir Timothy
Temple-Morris, Peter


Redwood, John
Thompson, Sir D. (Calder V)


Riddick, Graham
Thompson, Patrick (Norwich N)


Ridley, Rt Hon Nicholas
Thorne, Neil


Ridsdale, Sir Julian
Thornton, Malcolm


Roberts, Rt Hon Sir Wyn
Townend, John (Bridlington)


Roe, Mrs Marion
Tracey, Richard


Rost, Peter
Tredinnick, David


Rowe, Andrew
Trippier, David


Rumbold, Rt Hon Mrs Angela
Twinn, Dr Ian


Sackville, Hon Tom
Vaughan, Sir Gerard


Shaw, David (Dover)
Viggers, Peter


Shaw, Sir Giles (Pudsey)
Wakeham, Rt Hon John


Shaw, Sir Michael (Scarb')
Waldegrave, Rt Hon William


Shelton, Sir William
Walden, George


Shephard, Mrs G. (Norfolk SW)
Walker, Bill (T'side North)


Shepherd, Colin (Hereford)
Waller, Gary


Shepherd, Richard (Aldridge)
Wardle, Charles (Bexhill)


Shersby, Michael
Warren, Kenneth


Skeet, Sir Trevor
Watts, John


Smith, Tim (Beaconsfield)
Wells, Bowen


Soames, Hon Nicholas
Wheeler, Sir John


Speed, Keith
Whitney, Ray


Speller, Tony
Widdecombe, Ann


Spicer, Sir Jim (Dorset W)
Wiggin, Jerry


Spicer, Michael (S Worcs)
Wilkinson, John


Squire, Robin
Wilshire, David


Stanbrook, Ivor
Winterton, Mrs Ann


Stanley, Rt Hon Sir John
Winterton, Nicholas


Steen, Anthony
Wolfson, Mark


Stevens, Lewis
Wood, Timothy


Stewart, Allan (Eastwood)
Yeo, Tim


Stewart, Andy (Sherwood)
Younger, Rt Hon George


Stewart, Rt Hon Sir Ian



Stokes, Sir John
Tellers for the Ayes:


Sumberg, David
Mr. Nicholas Baker and


Summerson, Hugo
Mr. Timothy Kirkhope.


Tapsell, Sir Peter





NOES


Adams, Mrs Irene (Paisley, N.)
Clay, Bob


Allen, Graham
Clelland, David


Anderson, Donald
Clwyd, Mrs Ann


Archer, Rt Hon Peter
Cohen, Harry


Armstrong, Hilary
Cook, Frank (Stockton N)


Ashdown, Rt Hon Paddy
Cook, Robin (Livingston)


Ashton, Joe
Corbett, Robin


Aspinwall, Jack
Corbyn, Jeremy


Banks, Tony (Newham NW)
Cousins, Jim


Barnes, Harry (Derbyshire NE)
Crowther, Stan


Barron, Kevin
Cryer, Bob


Battle, John
Cunliffe, Lawrence


Beckett, Margaret
Cunningham, Dr John


Beith, A. J.
Dalyell, Tam


Bell, Stuart
Darling, Alistair


Bellotti, David
Davies, Rt Hon Denzil (Llanelli)


Benn, Rt Hon Tony
Davies, Ron (Caerphilly)


Bennett, A. F. (D'nt'n &amp; R'dish)
Davis, Terry (B'ham Hodge H'l)


Bermingham, Gerald
Dewar, Donald


Bidwell, Sydney
Dixon, Don


Blair, Tony
Doran, Frank


Blunkett, David
Dunnachie, Jimmy


Boyes, Roland
Eadie, Alexander


Bradley, Keith
Edwards, Huw


Bray, Dr Jeremy
Enright, Derek


Brown, Gordon (D'mline E)
Evans, John (St Helens N)


Brown, Nicholas (Newcastle E)
Ewing, Harry (Falkirk E)


Caborn, Richard
Ewing, Mrs Margaret (Moray)


Callaghan, Jim
Fatchett, Derek


Campbell, Menzies (Fife NE)
Faulds, Andrew


Campbell, Ron (Blyth Valley)
Fearn, Ronald


Campbell-Savours, D. N.
Field, Frank (Birkenhead)


Canavan, Dennis
Fields, Terry (L'pool B G'n)


Carlile, Alex (Mont'g)
Fisher, Mark


Carr, Michael
Flannery, Martin


Clark, Dr David (S Shields)
Flynn, Paul


Clarke, Tom (Monklands W)
Foster, Derek






Foulkes, George
Litherland, Robert


Fraser, John
Livingstone, Ken


Fyfe, Maria
Livsey, Richard


Galloway, George
Lloyd, Tony (Stretford)


Garrett, John (Norwich South)
Lofthouse, Geoffrey


Garrett, Ted (Wallsend)
Loyden, Eddie


George, Bruce
McAllion, John


Gilbert, Rt Hon Dr John
McAvoy, Thomas


Golding, Mrs Llin
McCartney, Ian


Gordon, Mildred
Macdonald, Calum A.


Gould, Bryan
McFall, John


Graham, Thomas
McKelvey, William


Grant, Bernie (Tottenham)
McLeish, Henry


Griffiths, Nigel (Edinburgh S)
McMaster, Gordon


Griffiths, Win (Bridgend)
McWilliam, John


Hain, Peter
Madden, Max


Hardy, Peter
Mahon, Mrs Alice


Harman, Ms Harriet
Marek, Dr John


Hattersley, Rt Hon Roy
Marshall, David (Shettleston)


Haynes, Frank
Marshall, Jim (Leicester S)


Heal, Mrs Sylvia
Martin, Michael J. (Springburn)


Healey, Rt Hon Denis
Martlew, Eric


Henderson, Doug
Maxton, John


Hinchliffe, David
Meacher, Michael


Hoey, Kate (Vauxhall)
Meale, Alan


Hogg, N. (C'nauld &amp; Kilsyth)
Michael, Alun


Home Robertson, John
Michie, Bill (Sheffield Heeley)


Hood, Jimmy
Mitchell, Austin (G't Grimsby)


Howarth, George (Knowsley N)
Moonie, Dr Lewis


Howells, Geraint
Morgan, Rhodri


Howells, Dr. Kim (Pontypridd)
Morley, Elliot


Hoyle, Doug
Morris, Rt Hon A. (W'shawe)


Hughes, Robert (Aberdeen N)
Morris, Rt Hon J. (Aberavon)


Hughes, Roy (Newport E)
Mowlam, Marjorie


Hughes, Simon (Southwark)
Mullin, Chris


Illsley, Eric
Murphy, Paul


Ingram, Adam
Oakes, Rt Hon Gordon


Janner, Greville
O'Brien, William


Jones, Barry (Alyn &amp; Deeside)
O'Hara, Edward


Jones, leuan (Ynys Môn)
O'Neill, Martin


Jones, Martyn (Clwyd S W)
Orme, Rt Hon Stanley


Kaufman, Rt Hon Gerald
Parry, Robert


Kennedy, Charles
Patchett, Terry


Kilfoyle, Peter
Pendry, Tom


Kinnock, Rt Hon Neil
Powell, Ray (Ogmore)


Kirkwood, Archy
Primarolo, Dawn


Kumar, Dr. Ashok
Quin, Ms Joyce


Lambie, David
Radice, Giles


Lamond, James
Randall, Stuart


Leadbitter, Ted
Redmond, Martin


Leighton, Ron
Rees, Rt Hon Merlyn


Lewis, Terry
Reid, Dr John



Robinson, Geoffrey
Stott, Roger


Robinson, Peter (Belfast E)
Strang, Gavin


Rogers, Allan
Taylor, Mrs Ann (Dewsbury)


Rooker, Jeff
Taylor, Matthew (Truro)


Rooney, Terence
Thompson, Jack (Wansbeck)


Ross, Ernie (Dundee W)
Turner, Dennis


Rowlands, Ted
Walley, Joan


Ruddock, Joan
Wardell, Gareth (Gower)


Sedgemore, Brian
Wareing, Robert N.


Sheerman, Barry
Watson, Mike (Glasgow, C)


Sheldon, Rt Hon Robert
Welsh, Andrew (Angus E)


Shore, Rt Hon Peter
Welsh, Michael (Doncaster N)


Short, Clare
Williams, Rt Hon Alan


Skinner, Dennis
Williams, Alan W. (Carm'then)


Smith, Andrew (Oxford E)
Wilson, Brian


Smith, C. (Isl'ton &amp; F'bury)
Winnick, David


Smith, Rt Hon J. (Monk'ds E)
Worthington, Tony


Smith, J. P. (Vale of Glam)
Wray, Jimmy


Snape, Peter
Young, David (Bolton SE)


Soley, Clive



Spearing, Nigel
Tellers for the Noes:


Steel, Rt Hon Sir David
Mr. Ken Eastham and


Steinberg, Gerry
Mr. Allen McKay.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

LOCAL GOVERNMENT BILL [LORDS) [MONEY]

Queen's Recommendation having been signified—
Resolved,

That, for the purposes of any Act resulting from the Local Government Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

(a) any sums required by the Secretary of State for—

(i) paying to the Local Government Commission for England established under that Act amounts required by that Commission for carrying out its functions;
(ii) paying compensation to persons who cease, under that Act, to hold office as members of the Local Government Boundary Commission for England; or
(iii) meeting expenses incurred by a staff commission established by an order under that Act; and

(b) any increase attributable to that Act in the sums payable out of money so provided under any other enactment.—[Mr. Patnick.J

Stamp Duty (Temporary Provisions) Bill

Order for Second Reading read.

The Financial Secretary to the Treasury (Mr. Francis Maude): I beg to move, That the Bill be now read a Second time.
Just before the Christmas recess, my right hon. Friend the Chancellor made a statement announcing a package of measures designed to help with the problem of mortgage arrears and repossessions and to stimulate the housing market generally. The Bill gives effect to one aspect of my right hon. Friend's package—his proposals to increase the stamp duty threshold from £30,000 to £250,000 for eight months starting from 20 December last year. We debated last week the resolution that founds the Bill.
This is a short Bill. Clause 1 lifts the stamp duty threshold for purchases of land and buildings up to £250,000, applying to documents executed between 20 December last year and 19 August 1992. Clause 2 provides a procedure for giving refunds where documents have been executed since 20 December 1991 and stamped before 16 January, the date the resolution took effect.
Stamp duty on property transactions runs at 1 per cent. of the purchase price, and it applies to all transactions above the threshold. During the eight-month moratorium, about 90 per cent. of private house purchases—about 600,000 transactions—will not bear stamp duty. That means that housebuyers, the people who generally pay the charge, will be able to save up to £2,500 on the cost of a house. For someone buying the average-priced house, it means a very useful saving of £600.
The purpose of the measure is to encourage people considering buying homes to get on with buying their houses or flats and to prompt others to bring forward their purchases to take advantage of the moratorium. That is why the threshold is lifted for only eight months; on 20 August it will go back to £30,000.
It will, of course, be a little while before the effects of the measure show up in the levels of house sales. It takes time to decide on the right house and to go through the formalities of buying, so it would be nonsensical to argue, as some have sought to do already, that the measure has failed. It is far too early to see its effects, but the measure has been very widely welcomed by the Council of Mortgage Lenders, the House Builders Federation and many others as a helpful spur to a depressed housing market.
The cost of the measure to the Exchequer will be about £110 million in the current financial year, and £310 million in 1992–93. As my right hon. Friend said in his statement, that cost will be met out of the public sector borrowing requirement saving of £1 billion from deferring the abolition of stamp duty on shares.
Over the coming months, the measure will mean that many thousands of people will pay less to buy their new homes because they will not have to pay stamp duty. I am sure that it will encourage and facilitate house purchasers and so provide a real stimulus to the housing market. I commend the Bill to the House.

Dr. John Marek: In the eight or nine years that I have been a Member of the House, I have not heard any Minister make a Second Reading speech as short as

that which has just been made by the Financial Secretary to the Treasury. It sounded as though it was being read from a prepared script. Indeed, I seemed to recognise in it large sections of the press release issued on 19 December.
The Financial Secretary gave no explanation of why the Bill is suddenly necessary. He gave no reason for the Government suddenly being able to find £400 million, although the press release said something about where the money has come from. He gave no reasons for why the Government have chosen to spend that money in this way.
It was a pity that the Financial Secretary's speech took such a short time because that means that the Opposition will have to pursue the Bill just that little bit further than normal because we want to ensure that the Government are acting properly and to ascertain their intentions. As I do not know the Government's intentions from the Financial Secretary's speech, I shall have to think of some myself.
I begin by asking whether the Bill will reduce homelessness. This country has a housing crisis and homeless people. I know that several of my hon. Friends will seek to address that topic if they catch your eye, Mr. Speaker. Homelessness will not be affected by the Bill. People will continue to be homeless. I must also ask whether the Bill will stop houses being repossessed. It may help a little if, as a result, the lenders—the building societies and the banks—are a little less keen to repossess. I should have liked the Financial Secretary to comment on that but, unfortunately, he did not. However, I do not think that the Bill will help to alleviate the problem of repossessions. The Bill will not rescue those who are in arrears with their mortgage interest payments—not a bit of it. It will not lower interest rates. Furthermore, it will not extend housing benefit to people in difficulties.
The Government could have addressed all those issues. If they could not make provision for them all in this Bill, at least we might have expected to hear from the Financial Secretary why all those important and serious matters, such as homelessness and people's difficulty in repaying their mortgage at a time of very high interest rates, were not included in the Bill and why the Government did not take action. Of course, it is a question not of a Government who cannot take action, but of a Government who will not take action.
The Bill contains one major provision—that stamp duty will be relieved for about eight months. That means that for eight months those who would normally have paid 1 per cent. stamp duty when buying a property priced between £30,000 and £250,000 will not now have to do so.
The Bill is supposed to kick-start the market. The Government have come up with this solution and are taking up the time of the House to debate kick-starting the market by a Bill that will ease stamp duty payments. It is a great pity that the Government have done that and that they did not seek instead to introduce a Bill to increase manufacturing because that might have increased trade between this country and other European Community member states. The Government could have introduced a Bill to increase employment. All those measures would have given a kick-start to what the Government desire—a better "feel good" factor before they have to face the electorate at the polls. If manufacturing was increased, more people would be in work, paying taxes and have disposable income to spend. More people would "feel good". The same effect would be created if trade or employment were increased. But that is not what the


Government have done. That shows the serious difference between the Conservative party and the Opposition. The Conservative party is playing politics. It is not interested in tackling the root causes of our decline during the past 10 years or our economic problems.
The Conservatives have a one-club solution to our economic problems. Interest rates must be high enough to ensure that inflation is low enough. The Opposition take the diametrically opposite view. One club is not enough. Of course, inflation must be low for prosperity. But high interest rates are not good for prosperity. There are ways of increasing manufacturing, trade and employment. The Government could have introduced a Bill to tackle those issues. They have not done so because the Tory philosophy is built on the market.
The Tories believe that the market must not be meddled with but left to its own devices. But unfortunately the market does not make anything. It does not export anything. The market is greedy and does not take account of the well-being of the economy of the United Kingdom. It is not in the interests of the market to do so. That is indisputable.
It has been the Tory philosophy to leave the market entirely alone, yet with this Bill they are interfering in the market. If they were true to their philosophy and left the market strictly alone, the Bill would not be before us tonight. They would have said that the housing market was of no concern to them. It would be of no concern to them if citizens of Britain who bought houses three or four years ago when interest rates were low had a cross to bear when interest rates suddenly and catastrophically doubled.

Mr. Geraint Howells: The hon. Gentleman knows my constituency well. There is a great deal of anxiety there about repossession of homes. The number of homes repossessed last year was 100 per cent. up on the figure for five years ago. There is a great deal of anxiety about repossessions, whatever views the Government hold on the issue.

Dr. Marek: I am grateful to the hon. Gentleman for making that point. It is true that there is a great deal of anxiety about repossessions. I shall seek to persuade the House that the Bill will do nothing or very little to alleviate the problem of repossessions that we are suffering at present.

Mr. Frank Haynes: The Minister has not taken a blind bit of notice of what my hon. Friend has been saying about what the Government could and should do. I think that he is going to listen now. It is the obvious thing that my hon. Friend should say straightforwardly to the Minister that the Bill is a racket. It is a quick fix job because we are coming up to an election. The Government hope that they can catch one or two votes because they know what the position will be when the election is called. The Bill is a fix and a racket. That is what the Government stand for as far as the electorate out there is concerned.

Dr. Marek: My hon. Friend puts the point succinctly and straightforwardly. Of course, his argument hits at the heart of the matter and at the Government's policies. I hope that my hon. Friend will not mind if I delve into Government policy a little further to pin round their necks the policy that they seek to put through the House of

Commons. It is, of course, a racket, a gimmick, and they hope that they will be able to reimpose the tax as soon as the election is over.

Sir William Clark: Rubbish.

Mr. Marek: It is not rubbish.
One amendment is designed explicitly and purely to help the Conservative party. I shall not deal with it at the moment save to say that it is the one that changes from 20 August to 7 May the date on which stamp duty becomes payable again. Of course it would be very helpful to the Conservative party if there were a great many transactions on 5 and 6 May to make it appear that the market had been kick-started. However, I shall explore that matter later. At this stage my theme is that this is an election gimmick. The Conservative party would not have found this money in a million Sundays if it had not been for the fact that there must be an election by a date in July.
Tory philosophy has been to leave the market alone, yet here the Government are interfering. The reason, of course, is that the election is coming and they want the "feel good" factor to operate in their favour. To emphasise that point I should like to quote from the research note that was produced by the Library on 15 January. On page
5 the note says:
The main reason why the Government wants to act is that economists now generally accept that that there is a strong link between the housing market and general consumer wealth effects. Put simply, the price of our houses and, perhaps more importantly, the rate at which it is increasing or decreasing, affects how we, as consumers, spend our money.
The Library is always very careful not to take one side—either the Government's side or the Opposition's side—in any argument in this House. Here, however, it says quite clearly that
there is a strong link between the housing market and general consumer wealth effects.
That is a very telling statement and amounts to a very strong indication of the Government's reason for introducing this Bill. The Library's research note goes on to quote the Bank of England's quarterly bulletin of February 1990. Four effects are noted. The first is:
A buoyant house market stimulates considerable purchases of related consumer durables. This is outside the scope of this note, but it is not insignificant in its own right." The second point that the bulletin makes is this:
Rising capital values…leads to an increase in net cash withdrawals. This is mainly effected by bequests and is…[an] increasingly common feature of consumers' lifetime income profile following the death of the first generation of home owners on a large scale.
That is further support for my proposition as to the reasons for the introduction of this Bill. This is the bulletin's third point:
Work was done on 'equity release', the extent to which homeowners manage to release some of the capital that they had in their home either during continued occupation or when they exchanged residences. Although 'equity release' was positively related to buoyant market conditions it was not a significant macro-economic phenomenon.
Making the fourth point, the bulletin says:
The Bank found that rising capital values influenced consumers' decisions about saving.
And this is important:
Rising prices persuaded individuals to reduce their savings held in other, more liquid forms.
This is what happened three, four, five years ago when we had the last housing market boom. House prices were rising, and home owners were persuaded to part with their savings. The Government think that this move will have


the same effect, that it will kick-start the economy and, miraculously, people will forget what happened three or four years ago and will start spending. I have news for the Government: people are not that stupid, and they will not be fooled twice.
Those comments, from the Library and the Bank of England, are not the only ones. One can adduce a further piece of evidence from the Financial Times. I could paraphrase this, but one should always give the source of one's information, and there has been quite a bit of press comment about the Bill and whether it will work. When it was announced before Christmas, the Financial Times reported:
In the City, there was scepticism about the effects of cutting stamp duty and speculation that the eight-month period was deliberately timed to coincide with the run-up to the next general election.
It does not take much to divine that. Mr. John Wrigglesworth, an analyst at UBS Phillips and Drew, said:
We saw in 1988 what a deadline concession does to the market, and a 1 per cent. cut in a falling market does not mean much.
There is then the problem of what will happen in the three or four months after 19 August. The Financial Times was right to highlight the problem of going for a Bill that will give a relaxation that will be abruptly cut off on 19 August. I shall not dwell on this now, but we may be able to discuss what will happen after 19 August when we deal with an amendment later. I give notice to the Financial Secretary that I should like to hear, as I am sure that the House would like to hear, a little more about what he thinks will happen after 19 August if the House sees fit to pass the Bill.

Mr. Tim Smith: The hon. Gentleman says on the one hand that this is an insignificant measure that will have no effect on the housing market, and then on the other that it is so significant that it will affect decisions about whether people buy or sell before 19 August. Which is it—significant or insignificant?

Dr. Marek: We can explore this later. The Financial Times and other commentators have expressed considerable doubt as to whether this move will have a significant effect on the Government's aim of kick-starting the economy. On the other hand, such house purchases as are made will be concentrated in the period up to 19 August. After that, nothing will happen in the market. It is a bit of both. I do not think that it will be effective, but to the extent that it is effective, it will distort the market.

Mr. Bob Cryer: When we debated the Ways and Means resolutions that were the legislative underpinning for this Bill, the hon. Member for Faversham (Mr. Moate), a Conservative Member of Parliament, made the very point that my hon. Friend has just made—that the Bill will be a disincentive against entering the housing market after its provisions end. He pleaded with the Government to assure him that the cutting of stamp duty would continue after August. Therefore, I was surprised when the hon. Member for Beaconsfield (Mr. Smith) stabbed one of his hon. Friends in the back, and made such sneering remarks.

Dr. Marek: My hon. Friend must know what the Conservative party is like. It does not surprise me. The record will show the truth of the matter.
There was further press comment after Christmas. As I am sure that hon. Members would like to know the source

of the article to which I shall refer, I shall not paraphrase. The article appeared in The Guardian on 4 January and was written by Simon Beavis, the business correspondent. It reads:
The Government's decision to suspend stamp duty payments on housing transactions will do nothing to revive house prices or housebuilding before 1993, a leading construction industry chief said, yesterday.
This would make the present downturn in the housing market one of the longest on record, John Smith, chairman of the Building Employers' Confederation, said.
The depressed construction sector saw no prospect of recovery this year even if the economy as a whole began to improve. Despite a rise in new housing starts in the third quarter of 1991, 'the housing market as a whole shows no sign of real revival', he said."
An eminent person who is involved in the construction industry is saying that the Bill will not help it. I have already said that it will not help manufacturing, trade or employment. It will not help either anyone who has had his house repossessed or someone who is in mortgage difficulties. If the article is right, it will not help anybody in the construction industry. The article continues:
His bleak assessment coincided with the new poll by Gallup for Gartmore, the investment management group, which found that one in five people are waiting until after the election before moving home. Four out of 10 thought that the recession would not end before 1993.
Even the Prime Minister is hedging his bets now and thinking that it might not end until 1993.
When commenting on the eight-month abolition of stamp duty, Mr. Smith, who is the chairman of the Building Employers Confederation, said that
the new measures introduced to stem repossessions would help to reduce the stock of unsold new houses, but did not go far enough. 'It will be 1993 before we see any real recovery in house prices and housebuilding.'

Mr. Harry Cohen: One of the problems with the present level of house prices is that many people have a house that would sell for less than the mortgage which is attached to it. If such a person sold his house he would still be indebted, and possibly considerably. Does my hon. Friend agree that the Government have not addressed that problem in terms of the Bill and, indeed, have not given any consideration to the people who are in the plight that I have described?

Dr. Marek: My hon. Friend is right. I hope that he will seek to catch your eye later in the debate, Mr. Deputy Speaker, with a view to advancing those arguments. There is nothing in the Bill from which anyone in difficulties can take consolation.
The Government have a large majority in the House, although they obtained only 42 per cent. of the vote in 1987, and I do not fancy my chances, along with my right hon. and hon. Friends, of beating them, in trying to improve the Bill or in adding to it measures that would make the Bill more acceptable and protect those who are in difficulties with their mortgage arrears or who have had their homes repossessed. We shall, however, have to wait and see.
The green shoots of the economy have, unfortunately, been frozen off. The plant was left outside in the back garden and the frost has got it. That is being admitted by the Government, including the Prime Minister. There are many glum faces among Members on the Government Benches.

Mr. Maude: That is because they are listening to the hon. Gentleman.

Dr. Marek: Indeed. They are hearing and agreeing with the veracity of my remarks.
There is no recovery in sight, and any recovery that there may be will be spasmodic and minor. The Government, typically, have not produced a Bill that will get the economy back into shape by kick-starting it. They are trying to kick-start a spurious housing market to try to create a consumer boom, to make people think that they are wealthy and to make them feel good so that they can win the election. It is all about the election and gimmickry; it is not about good government and it is certainly not about consideration for those who have housing difficulties.
I remind the House that this change in Government policy is not the only one. The Prime Minister, when he was a social security Minister, cut mortgage support from 100 per cent. to 50 per cent. for the first six months for people who had to live on benefit either because they had been made redundant or because they had become unemployed. Indeed, when the right hon. Gentleman introduced the measure five years ago he boasted about it. He said that there was too much support for housing. Now, the Government have come round full circle. Suddenly, the reality of an election is before them and they can see the deadline of the buffers only a few yards ahead of them. That is why they are trying to help the housing market in such a peculiar way.
There has been another change in Tory party philosophy recently. Only a year ago, mortgage interest relief at 40 per cent. was withdrawn and restricted to the 30 per cent. tax rate.

Sir William Clark: Twenty-five per cent.

Dr. Marek: I am sorry——

The Minister for Shipping (Mr. Patrick McLoughlin): A Freudian slip.

Dr. Marek: It was not a Freudian slip. The real rate of taxation under the Tory Government is 25p in the pound plus 9p for national insurance, which makes 34 per cent. Under the last Labour Government, national insurance was only 6.5p in the pound. Value added tax was only 8 per cent., but under the Tories it is now 17.5 per cent. Under Labour, the burden of taxation was about 34 per cent.; under the Tories, it is 37 per cent. I do not need any lectures on who is the high taxing party—it is the Tories—[Laughter.] They may laugh, but let them challenge what I am saying. I shall give way to any Tory Member who wishes to do so. The high taxing party is the Tory party. The burden of taxation in the 1980s was always higher than it was in the 1970s. I am waiting for a Tory Member to challenge my figures. Of course, no one will do so—[Interruption.] Oh, one will.

Mr. Maude: The hon. Gentleman knows that the burden of taxation on present taxpayers rose in the first two years of this Government because the last Labour Government had spread the burden of taxation on to the next generation. We had to unmortgage the country's future, and since then the burden of taxation has steadily fallen.

Dr. Marek: My recollection of events is slightly different. Before 1979, the Conservative party said that it had no proposals to put up value added tax. As soon as it

came to office, it almost doubled it, from 8 per cent. to 15 per cent. That was why the burden of taxation shot up between 1979 and 1981. That is a slightly different story.

Mr. Cryer: Does my hon. Friend agree that the burden of taxation is actually higher under the Tories, but they carefully differentiate between direct and indirect taxation? The combination of the two is much higher under the Tories. The increase in value added tax bears most heavily on the poor as it is a bigger share of their income than it is of the income of the wealthy. Therefore, under the Tories not only has the burden of tax increased overall; it has actually increased more for the poor.

Dr. Marek: There is much in what my hon. Friend says. I do not want to digress too much, but we are talking about taxation: the Bill gives away money and forgoes tax revenue. The Government could have kept that money, or at least given it away in a different manner. Although VAT in this country is not as regressive as it is in other European Community member states, it has certain regressive aspects.
The proportion of our national income that is taken in tax has risen from 34.75 per cent. In 1978–79 to 37 per cent. in 1991–92. In 1978–79, a married couple on typical earnings paid 30.9 per cent. of their income in tax; now, they pay 34.9 per cent. There is no doubt that the burden of taxation has risen, although there may be arguments across the Floor of the House about the reasons for that rise; and the fact is that the Conservatives are the high-tax party.
I cannot argue that, because the Government are giving back a little tax, we should vote against the Bill, and I shall not urge my hon. Friends to oppose its Second Reading—although we retain our right to examine the amendments carefully. None the less, I wish that the Government had presented us with a different Bill, and that the taxation that is being forgone was being forgone in a better way.
It is clear that the Conservative party is rattled, for it has changed its philosophy. At one stage, they say that we should not interfere with the market; at another stage, they say that we should. I think that I have demonstrated that the Bill is an election gimmick, and that after 9 April—or is it 7 May?—it will be speedily forgotten.
Perhaps it is not too late for the Government to propose an adjournment, so that we can return to the Bill next week or at some other time. Perhaps they will change their mind, and incorporate some of our suggestions. Labour's programme is eminently sensible. We propose, for instance, that local authorities be enabled to acquire properties selectively on the private market. Why was not something done? Why was a deal reached quietly, with building societies and banks saying, "We will not go so heavy on repossessions if you—the Government—forgo taxation in the form of stamp duty, and also insist that DSS money is forwarded directly to us rather than being given to home owners"?
Why did not the Bill contain a provision enabling local authorities to acquire properties? Housing associations could and should be encouraged to enter into deals with local authorities enabling them to manage temporary accommodation on authorities' behalf; authorities could be enabled to acquire buildings and convert them into short-stay hostels for homeless people; social landlords could be urged to adopt "living above the shop" initiatives,


which have been pioneered in Cambridge and elsewhere. Local authorities could he encouraged to speed up the letting of their empty properties; the Housing Corporation could monitor the number of empty properties that each Department has, and the information would be passed to the relevant Secretary of State and the National Audit Office. That would exert pressure on Departments to bring their empty properties swiftly into use.
The Bill could have launched a real attack on the appalling state of housing in this country, and on the crisis that we face. Nothing in it, however, remotely suggests that the Government are thinking along those lines, or intend to present the House with another Bill in the future. Local authorities could have a right to acquire derelict private properties. Housing association and local authority homes which are unjustifiably left empty for long periods could be given to other social landlords to be managed more effectively. Moreover, it could be made more cost effective for local authorities to lease decent homes from the private rented sector for use as temporary accommodation.
In addition, there is the Labour party scheme to turn mortgage interest repayments into rent. There would be a part mortgage repayment and a part rent repayment, if people got into difficulties. I understand from my Front Bench Environment colleagues that the Opposition have been talking to the Council of Mortgage Lenders for some time about these matters, yet the Government have not seen fit to do anything positive to try to get round this terrible crisis.
This is an election gimmick proposal. Interest rates are at a record level. In 1979 the Conservative party promised to keep mortgages below 10 per cent. but they have been below 10 per cent. on only one or two occasions. If anybody looks at interest rates under the Labour party in the 1970s and compares them with the interest rates of the Conservative party in the 1980s, he or she will see the great

difference between the interest rate policies of the two parties. I have every confidence that after the next election the Labour Government will pursue the same policy of low interest rates.
The number of mortgage repossessions represents an all-time record. Figures provided by the Lord Chancellor's Department show that 33,778 families were served with mortgage repossession orders in the first six months of 1991. The figure for the whole of 1991 will he about 80,000 properties repossessed, yet the Bill does nothing whatsoever to make that figure 77,999 even. Not one house that has been repossessed will be affected by the Bill.
There is a record shortage of affordable housing. More than 1.25 million homes have been sold, yet very few of those homes have been replaced. The total number of homes built by local authorities in 1990 was a mere 13,000 compared with 92,000 in the final year of the last Labour Government.
Finally, we have record levels of homelessness. In 1990, 145,800 households were accepted as homeless by English local authorities, compared with 56,000 in 1979. That is the legacy of 13 years of wasted Conservative Administration: more repossessions, more homelessness, higher interest rates and a disdain about doing anything for the average human being in this country who, through no fault of his or her own but as the result of the Tory party's policies, has suffered the effects of persistent high unemployment. It is a terrible indictment that has not been lost upon the voting public.
The Bill will help none of those unfortunate people. It will not help the economy. It will not kick-start anything, but the Government will, no doubt, continue to kick everything. However, it will not be long before we have a Government who will do something about the current appalling housing crisis. That will be the Labour Government who will take office after the next general election—when this Government dare to call it.

Mr. A. J. Beith: The Bill does not address the housing crisis. That does not mean that it ought necessarily to be opposed. I am not clear, having listened to the speech of the hon. Member for Wrexham (Dr. Marek), whether the Labour party intends to oppose the Bill. I do not believe that it should be opposed and I intend to say why. Nevertheless, it is a wholly inadequate response to a desperate housing crisis.
The unlocking of council house money that is in council bank accounts—the receipts from council house sales—and the use of a significant part of that money to replace the houses that have been sold and to deal with the homelessness that so many local authorities face would be of considerable benefit to the housing market. A more determined effort to stem the repossessions and to turn mortgages into rents for those for whom a mortgage is no longer a financially viable option would be a significant contribution to the solution of the housing crisis. An attempt to attract private capital into the purchase and building of homes for rent could also make a significant contribution.
The Government have not sought the most cost-effective solution. The use of the business expansion scheme for building houses to rent has not proved a cost-effective means of stimulating the private rented sector. It is important to enlarge that sector, and the Labour party could encourage the investment of substantial capital by making it clear that there will be no wholesale imposition of rent controls.

Mr. Cryer: Is the hon. Gentleman saying that the Liberal party favours the abolition of rent control so that private landlords can rip off tenants with impunity? That surely is a new aspect of Liberal party policy, on which he might enlarge.

Mr. Beith: I thought the hon. Gentleman might say that. We are not arguing for the removal of the remaining limited rent controls, but I gather from what the hon. Gentleman says that the Labour party favours a return to a wholesale rent control system. On the basis of experience, I tell him that it simply will not work. It would ensure, as it did for many years, that no private capital was invested in rented housing because it would not be possible to obtain a return.
Liberal Democrats do not believe that the private housing sector can meet all our housing needs, but it can make a bigger contribution than it has in recent years. One of the tragedies of the post-war years was that the significant contribution that the private sector made—many people of my age grew up in privately rented housing—was gradually whittled away. Our housing opportunities were only purchase and the then large municipal sector; the options in between were insufficient.
There are now other elements in the equation such as the considerable social housing sector provided by voluntary housing associations, assisted by the Housing Corporation. The market is more complex than before, but the private sector has a significant part to play in the provision of rented housing. It will not play that part if there is a prospect of the wholesale imposition of rent controls. As the housing market is so badly off, the introduction of a potential new purchaser—the private landlord buying or building to rent—would be helpful. It would act as a significant stimulus to the housing market.
All those measures would have a more significant effect on the housing market than will the Bill, which is unlikely to make much difference, because houses are being sold for thousands of pounds less than people paid for them or the price at which they were valued 12 or 18 months ago. A difference of £600 on an average price house may be helpful and welcome to purchasers, but it is unlikely to generate more sales than a price drop of £5,000.
I am sceptical about the impact of the Bill. The Government are using the windfall gain of stamp duty revenue that would have been forgone if the stock exchange had been ready with its new transactions system for the abolition of stamp duty on share transactions.
I do not like stamp duty; I would rather get rid of it altogether. However, it is not top of my list for tax reforms or the removal of taxes. I would rather get rid of the poll tax, the council tax or even the 17.5 per cent. rate of VAT, which seems a particularly heavy burden on the pressed consumer market. I would not argue for the permanent retention of stamp duty on housing transactions, especially as we have got rid of it for so many other transactions.
We are not even considering a measure based on the belief that stamp duty should go, because it is to be reimposed on 20 August this year. It is a piece of temporary fiscal fine-tuning and the Government are not supposed to be in favour of fiscal fine-tuning. Ministers are always telling us what a bad thing it is, but I see no reason why we should not give it a go and discover whether it will have a beneficial effect on the housing market.
There will be some concern and opposition on 20 August when the duty is reimposed, but, as the hon. Member for Beaconsfield (Mr. Smith) rightly said, the extent of the anguish will be in direct proportion to its significance to the housing market in the meantime. I assume that it will not be that great, but that it will be welcome to those who are able to benefit from it because they are able to manage a house purchase during that period. Those who buy a house after 20 August will feel considerably aggrieved that they have not been able to benefit. The Government will not gain much popularity, but by then it will all be over so they will not be very worried. They may be sitting on the Opposition Benches by then and it will have long ceased to be a matter of concern to them.
I do not think that the limited nature of the Bill or its temporary character is any reason why hon. Members should want to march enthusiastically into the Lobbies and deprive potential beneficiaries of the short-term ability to purchase a house without the imposition of stamp duty. The duty is an irritant to many people, and many buyers—especially first-time buyers—feel that it is a tax that they should not have to bear. Such buyers are often most stretched when they first undertake a purchase and in the early months of payment, especially when the interest rates are as high as they have been recently.
I shall not oppose the Bill and I invite my hon. Friends not to do so. I hope that it goes through all its stages tonight. I am not aware that it is riddled with so many drafting defects that it need take us all night to dispatch the business, but there seems to be considerable zeal for detailed scrutiny by hon. Members around me. I am not quite sure what the motivation for that is, but I shall be interested to see whether the Opposition discover a drafting defect.
What sticks in my mind after studying the Bill is how little the Government are assuming that the housing market will change. I raised that point when we discussed the Ways and Means resolution. The Minister said that it was not reasonable to talk about revenue forgone in respect of improvements in the housing market because they would not have happened if the measure had not been introduced. However, if the Government expect the measure to cost only £400 million, they must be assuming that during this period there would have been no increase in housing transactions and no increase in housing values, except the little and the few induced by the Bill. That is a pretty depressing forecast for the housing market, but it is perhaps the Government's most honest recent forecast on any of the economic indicators. It suggests that the housing market will be in such a poor way during the coming months that the Bill is unlikely to make a great deal of difference.

Mr. Hugo Summerson: It is a pleasure to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith). I agreed with much of what he said about the impact of stamp duty on the housing market and what an irritant it is.
I declare an interest as a chartered surveyor. As such, I have been involved in many property transactions and I take this opportunity to welcome the Bill, which will reduce the cost of such transactions. The costs are far too high and have been for a long time. I have previously attacked the conveyancing system which gives many lawyers the opportunity to rake in large amounts of money. I believe that the system should be simplified so that it is not necessary to use the services of lawyers. Of course, it is not strictly necessary to use lawyers in property transactions now, but most people find it convenient, if expensive, to do so.
It is not necessary to use the services of estate agents when selling property. Many people think that they have to use estate agents when selling property. I assure them that they do not have to do so and that they can save themselves large amounts if they do it themselves.
We have heard from the hon. Member for Wrexham (Dr. Marek) about the Bill. I thought that I heard the sound of many red herrings being dragged about, especially the little dissertation on VAT. The hon. Gentleman conveniently forgot that, under the previous Labour Government, there was a higher rate of VAT, at 25 per cent., on so-called "luxury" items, which included television sets. On that basis, that rate being three times as high as the then so-called "basic" rate of VAT, if there were ever another Labour Government, would they apply the same differential, with VAT on television sets being raised to 52.5 per cent?

Mr. Thomas Graham: Is the hon. Gentleman aware that the former Prime Minister stated that under no circumstances would the Conservative Government double VAT?

Mr. Summerson: I am talking about the Labour party, following what it did last time and tripling the rate of VAT on so-called "luxury" items.
Once the Bill has become law, I recommend that the London borough of Waltham Forest reduces its enormous holdings of property. That Labour-controlled council

owns property which brings in at least £1 million. Anyone who walks down Hoe street in my constituency will come across two shops side by side which are derelict and boarded up. They been derelict and boarded up for years. That council is always complaining about lack of money, yet is has resources to hand, and if it only used them it could benefit the entire community.
The hon. Member for Wrexham spoke a great deal about whether the Bill would kick-start the market. I remind him that kick-starting is a rather inefficient method by which to start a very small engine. The housing market in such terms is rather a large engine. We shall never be able to kick-start it; we need a battery by which to get it going. The Bill will put some charge into the battery. A number of factors will get the housing market moving and the Bill is just one of them. Any reduction in the cost of buying and selling property is welcome. I welcome the Bill.

Mr. Thomas Graham: I believe firmly that the Bill is an out-and-out gimmick. I remember coming into the House in the week in which the legislation was announced when I was dealing with a constituent whose house was being repossessed. I will tell the story later because it makes sense in what I am about to say. It is unbelievable that we should be given such a response when under this Prime Minister, in this year alone, 300 people every day have had their houses repossessed. Last year, 80,000 houses were repossessed. Since this ditherer has been Prime Minister, more than 750,000 people have lost their jobs.
I doubt whether the suspension of stamp duty will help the workers at Ravescraig who will lose their jobs and possibly their homes. It will not help the workers at Armitage Shanks, many of whom have bought their houses. The word "kick-start" is an insult to the thousands of people who have had their houses repossessed during the past decade of the Tory Government. The Government have done little or nothing —in fact, they have caused a massive problem in relation to council housing.
I look to the Government to do something for people. This Government are driving people into early graves. Not content with doing that, they have introduced the Bill while aware that they are not tackling the real problem.
Interest rates are raging. The Prime Minister has kept them at 15 per cent. when all businesses are calling for them to be reduced. Manufacturing and service industries might have been able to develop and allow workers to keep their jobs and maintain their mortgage or rent payments, but the Government have kept interest rates too high and are now introducing desperate measures to try to stop repossessions.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke of house sales. I have never seen such incredible hype from the Tory party and some of their friends out in the country who say that things are not too bad. They should come to my district or I can bring all the local newspapers to show them stories of people who bought their houses at £34,000 and £50,000 and are now taking the desperate measure of emigrating from Scotland for a job. Some of them had to drop their house prices by about £6,000 which gives a lucky chance for anyone with the money to buy them. I am sure that the hon. Member for Berwick-upon-Tweed would agree that there have been many such sad housing tales in Scotland.
I have seen the same problems in London. I am looking for a house—[Interruption.] I cannot hear the Conservative Members who are intervening from a sedentary position as I have a hearing aid—I am glad of that sometimes. Some people are trying to sell their houses for £30,000, £40,000 or £60,000 less than they paid for them. What will happen to those people? We are talking not just about repossession, but about absolute bankruptcy and the moral degradation that goes with it. The Government have placed people into such positions by kidding them and telling them the lie that everything was rosy. The former Chancellor that the Government dumped—

Mr. Alan Meale: Is my hon. Friend aware that 10 per cent. of home owners in Britain are at least two months in arrears with their mortgage repayments? Does that not support his argument and prove that the present position is serious?

Mr. Graham: Yes; it is a tragedy that 10 per cent. of those with mortgages are still behind in their payments. The Government do not seem to care about that.

Mrs. Llin Golding (: Is my hon. Friend aware that many people are now throwing the keys of their property on to the building society's desk because they can no longer cope with the mortgage? They tell the building society to keep the keys, then they walk off and disappear.

Mr. Graham: I had a phone call from a solicitor tonight who told me that a number of his clients were walking out and abandoning him. They were not attempting to tell anyone where they were going, but simply disappearing from the face of the earth. I am sure that we shall hear of more such cases after tonight.
Not long ago an ambulance man whose house was being repossessed came to see me. He was a young man who had never lost a day's work; he had worked constantly and had a young family of three. He bought a council house in Linwood and took on a mortgage that was not too expensive to repay. I am telling it straight to the Minister, and if he wishes to know who the man is I shall gladly let him know. He came to see me when he was facing the possibility of his house being repossessed and his family being made homeless. His wages had fallen dramatically as he was no longer doing normal hours and overtime. His wife had lost her part-time job because of the prevailing economic climate. He had been conned by the Government. He had been told, "This is great. Buy your house and you will live happily ever after." He took the Government's advice and he is now in desperate straits. He cannot pay his mortgage and his house is being repossessed. He came to me and we tried to get the local council to provide him with a house. The council tried desperately to accommodate him.
I also have a case involving a mother with two children at university who receive grants and loans. Her house was being repossessed and she wanted to know why the Government's provision applied only to new house purchases simply to stop repossessions. The Government could have acted on repossessions in a more meaningful way. She has a small part-time job. Her husband left her and disappeared to another country. The building society

wants to repossess her house and she has got to go. I fought for weeks until eventually we found a council house for her. The council had to come up with the goods because the woman was to be made homeless. That was another tragic case.
In those two cases the council fulfilled its obligation and housed those people. However, I have another eight cases involving people whose houses have been repossessed because they have lost their jobs, or there have been massive cuts in overtime or short-time working has been introduced. For the love of it, those people cannot provide enough money to pay their mortgages. There is no guarantee that the economy will improve so much that they will return to full-time work or that their employers will be able to increase their wages at least by the rate of inflation. Those eight people are desperate.
However, thousands of people in my constituency and around Renfrew are homeless and waiting for housing. They are desperate to see council officials because the people about whom I am concerned do not have collateral or insurance to get a house in the private rented sector. They can get houses only from the local council, but the councils do not have enough houses to provide housing for all the homeless or for people such as those I have described, who, as a result of the Government's mismanagement of the economy, have had their houses repossessed and have been driven to desperate measures.

Mr. Jimmy Wray: Does my hon. Friend agree that the stamp duty provision for a first-time purchaser will do nothing for people who already have mortgages? It is only a bribe to the building societies to get off their knees the people they have been robbing for the past five or six years. If the Government really intend to do something for people who have had their houses repossessed, they will have to reduce interest rates to 7 or 8 per cent.

Mr. Graham: I would go further than that. Renfrew district council has borne the brunt of the Government's mismanagement of the housing economy. Over the past few months, it has housed at least 10 people. That has possibly cost £80,000 a house, or £800,000 in all. In the face of that, the Government come up with a pittance of a few million pounds for all of Scotland to deal with homelessness. That might make one laugh, but it makes me sick to the teeth because the people about whom I am concerned are good people. They want to work and have the right to a decent job. Conservative Members can smile all the way to the bank, but those people can only smile all the way to the dole queue.

Mr. Meale: It is not only in Scotland that severe crises are occurring. At the moment, in my constituency 9,500 people are on the local authority waiting list, and 2,700 of them require special needs accommodation. Terminally ill people, severely disabled people and old people cannot get the right type of accommodation. In my area, 850 people are classified as homeless. Thousands of people throughout the east midlands are in exactly the same position. Thousands of people in the midlands have had their homes repossessed. The problem does not occur only in Scotland; it occurs throughout the United Kingdom.

Mr. Graham: I am most grateful for that information. I am aware of the terrible tragedy. The Government have inflicted poverty on Scotland, England, Ireland and Wales.


I am terribly ashamed to have a decent wage and to be able to afford a house when thousands of people who voted for us are living in squalid poverty because of the Government's ineffectual handling of the economy.

Mr. Meale: Perhaps my hon. Friend would like to consider that an argument that is often put by Conservative Members concerns empty properties. Will he explain to the House the misinformation that Conservative Members are trying to give? If every house were filled, hundreds of thousands of people would still be homeless or in need of proper accommodation.

Mr. Graham: That is a valid point when we are talking about the Government's measures supposedly to stop repossessions and help the homeless.
In Renfrew district, because of the climate. many houses suffer from dampness and condensation. Because of lead pollution in the water, councils have a problem in trying to keep houses fit. There are many empty houses through no fault of the council. I can relate to the Minister chapter and verse of some of the problems that Scotland faces. Councils need support from the Government to tackle the weather problems that create bad housing.
There are many empty houses in our area, but the council needs money to bring them back into a rentable state. The law dictates that those houses must not only be wind and watertight but fit for habitation. At present, Renfrew district council, along with other district councils, has suffered savage cuts. Thousands of millions of pounds have been cut during the decade during which the Tory party has been in power. That has caused a deterioration in our housing stock and put tremendous pressure on local councils to provide people with a roof over their heads.
It is not long since the former Prime Minister stood in a house with a bag of groceries in her hand. Hon. Members may ask, "What has this to do with stamp duty?" I shall tell them in a minute. The former Prime Minister was proud of what that bag of groceries cost. However, she would probably only have a slice of bread in that bag today. The house that she stood in would probably be a tent or a lump of cardboard. Today, the family concerned would not be able to afford the food that was in the bag. Many people can no longer afford to live comfortably.
Tonight I spoke to my mother, who is a pensioner. I told her that this week we would have the poverty debate and that tonight we would have the stamp duty debate. My mother said, "The stamp duty debate, son?" I said, "Yes, mother." She said, "What is that about?" I said, "Well, the Prime Minister has seen his chances slipping away, and the general election will be the nail in his coffin. Therefore, today he is attempting to buy a few votes, mother, and he has come up with this stamp duty measure." "Well, Thomas, tell me what it means," she said. I said, "It means that stamp duty will be abolished for houses that cost between £30,000 and £250,000." My mother said, "Goodness God, do people buy houses that cost a quarter of a million pounds? Son, it must be the biggest family in Britain if they are to live in a house costing £250,000. It must be the Taj Mahal palace." I said, "Mother, unfortunately, there are people who have £250,000 to spend on a house—but not around here. They are down south." I then had to explain what that meant.
At the end of the day, however, when I look in the mirror, I have to ask myself what the Bill really means. It certainly does not mean a lot to the people I know whose

homes are being repossessed. It is not the people in the high-flying jobs who are losing their jobs and houses; it is the plumbers, the butchers, the bakers the tailors, the toilet attendants and the council workers. They are the people who are being thrown on the dole and who do not have the money to pay the mortgage. Furthermore, they are not buying houses that cost £250,000. Their houses cost £16,000, £20,000 or £30,000. They are the people who are being thrown out of their homes because of repossessions. They are the first people to lose their jobs, and they are the people who cannot afford to build up a kitty to carry them over.
The Government are sick not to recognise that. Instead of trying to help some of his wealthy friends, the Prime Minister should have taken a look at something that could be targeted at the local councils to provide them with sufficient money to enable them to build homes for local people to rent. Such money would also enable the councils to make many of the empty properties fit for habitation and for renting.
Often when I speak in the House I see cynical smiles and grins on the faces of Conservative Members. That makes me angry. In other places, I might not be as civilised as I am in the House, and if I were to take the Financial Secretary into my community folk there would not be so nice to him as Tommy Graham. They would not sit back and simply accept that the Minister and his hon. Friends grin at their poverty and losses because they blame the Government for inflicting such damage on them. So I make a plea to the Financial Secretary in all sincerity: "When I am speaking with sincerity, please listen with sincerity."
I shall go further. I believe firmly that rural communities are also suffering and that the abolition of stamp duty will not help those in the towns and villages of Scotland and other areas—

Mr. Meale: Perhaps my hon. Friend will tell the Minister what good the Bill will do to those people at Ravenscraig who wish to remain in employment and who, because of the Government's strategy, have to change employment and, in the process, try to sell their homes in an area where massive numbers of houses will be put up for sale. What good will the few pounds of stamp duty that they save be to them?

Mr. Cryer: The answer is public ownership.

Mr. Graham: I am grateful for help on this matter.
The possibility of 1,200 steel workers selling their houses in the current housing market in Scotland is lamentable. There is no chance of selling even a dog's kennel in the housing market in Scotland if jobs and industries continue to be lost on the current scale. I must advise the Financial Secretary that there is no chance of the Armitage Shanks people selling their houses either—although they live in the constituency where the Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), has his house. As I said earlier, people trying to sell their houses have had to take dramatic cuts in price.

Mrs. Golding: My hon. Friend has mentioned Armitage Shanks. He may be aware that I represent the Potteries and the areas around Stoke-on-Trent and north Staffordshire where more than 600 jobs have been lost in a similar industry involving the manufacture of


kitchenware and bathroomware. It is an absolute disgrace. How does the Minister think that people can manage to keep up the repayments on their homes when they do not even have a job?

Mr. Graham: I am sure that my hon. Friend knows the answer that I will get. It will be the same one that everyone else gets. The Government will give people six months of dole money but after that abandon them to the desert of homelessness and unemployment.
Tonight we have seen an attempt to present a gimmick as a saviour. What an absolute disgrace. What inhumane treatment of the 80,000 people whose homes were repossessed last year. What an inhumane future the Government present to the 300 people daily who have had their houses repossessed this year. The Minister should hang his head in shame.
The Government should have made sufficient funds available to local authorities. There should have been a major house-building programme to give the homeless the right to a roof over their heads. More importantly, the Government should regenerate people's right to work. Instead of the end of stamp duty, our people should see the end of the Government. They have the right to a job that brings home a decent wage and can make them proud to be able to pay their rent or buy their own home. They have the right to a job that gives them consistency and the ability to live in this country decently and pay their mortgage for 25 years, rather than not knowing whether they will have a job this week, next week, tomorrow or the day after. Minister, stand up and fight for the homeless people and those who have had their houses repossessed instead of fighting for the moneyed people.

Mr. Harry Cohen: This measure to remove stamp duty for the next eight months is a stamp-sized effort by the Government to deal with a whole package of problems in the housing market. Stamp duty will be back on 20 August. As my hon. Friends have said, the measure is only for the election. It is an election gimmick. It is tinkering with the problems in the housing market and the suffering that they are causing. However, it is expensive tinkering. It will cost about £400 million. It is the only measure that the Government have taken to deal with the housing problem and it does not measure up to the scale of the problem.
I suspect that when the figures are announced in the next few weeks they will show that 100,000 houses were repossessed in 1991. Many more repossessions are in the pipeline. Every one of those 100,000 repossessions is a terrible tale of misery for the families and people whose homes have been snatched away from them as a result of the economic circumstances in which they have been placed. One in five of the homes on the market are repossessions. That is one of the reasons for the great collapse in the housing market.
That collapse was brought about by three main factors. The first was the uncontrolled rise in house prices which was way above inflation in the 1980s. The Government allowed prices to let rip as a way of making money, not to deal with people's housing circumstances for the future. It was just a way of making money. That bubble has burst with a vengeance. The Government are not prepared to

take responsibility for the policies that created the difficulties in the 1980s. So people have to pick up the problem.
The collapse was also brought about by record high interest rates, particularly when set against inflation. People had to pay high mortgage interest rates. Now on top of that we have the impact of the recession. Unemployment has gone through the roof. It rose by 700,000 last year. People have insufficient incomes to meet their bills. Unemployment is not the only problem; the argument about tax is relevant. People have other bills to meet. For instance, there is the poll tax, as well as VAT on the goods that they buy. For that reason, they do not have enough money to meet the record mortgage payments. In addition to all the personal misery that has been created, there has been a collapse of the housing market.
Hon. Members should consider the way in which the collapse has affected the construction industry. The fact is that if there is no housing market people do not have an incentive to build new homes. Obviously that affects the private sector. Many homeless people come to my surgery and to the surgery of the hon. Member for Walthamstow (Mr. Summerson). Homes should be built for such people, but, as the market collapse proves, this cannot be left to the private sector. In present circumstances, it will not do the job.

Mr. Summerson: I am sure that the hon. Gentleman will mention the housing action trust, which is doing excellent work in the London borough of Waltham Forest and will deal with two of the worst estates in the hon. Gentleman's constituency.

Mr. Cohen: Indeed. I have been arguing for an improvement in council estates. I welcome all such measures. The hon. Gentleman has referred to a particular problem that must be tackled. Overall, the Government have not invested nearly enough to improve council estates. That is why such serious problems have developed over several decades. Indeed, those problems have worsened during the past decade, when investment has been lacking.
However, the collapsed housing market is a different problem. It is a problem for people who want to own their homes. The market has failed to provide the houses that are needed. Only the local authorities can do the job effectively, yet the Government have prevented them from making the necessary investment. The ban on the use, for this purpose, of the receipts from the sale of council houses should be lifted. Indeed, the Government should have done that straight away. What we need is a package of measures to enable local authorities to build homes. While the matter is left to the market, homelessness will increase. Central intervention is required.
The £400 million that this stamp duty relief is costing would be better used to help the victims of repossession to stay in their homes. Those people should be allowed to convert mortgage payments to rent payments. Councils have a duty to house them and, as council accommodation is not available, that is an intolerable burden. The ricochet effect is felt by people in my borough of Waltham Forest —indeed, by people all over London—whose names are on waiting lists. Some families in very poor council accommodation need transfers. There are some, for instance, who need two bedrooms instead of one, but, because councils have a duty to house people whose homes


have been repossessed, others have virtually no chance of a transfer. The Government should put this money into helping the victims of repossession to stay in their homes. The fact that one in five of houses for sale is a repossessed home has killed the market. If the Government want to revive the housing market, they should find ways to enable those who face repossession to stay in their own homes.
In my intervention in the speech of my hon. Friend the Member for Wrexham (Dr. Marek), I made the point that, in the current state of the housing market, many people have mortgages that are greater than the value of their properties. If they cannot afford the mortgage repayments and are forced to sell their homes, they will still be saddled with astronomic debts for years to come. In effect, such people will be bankrupt, but the Government have not shown the slightest glimmer of concern; these people have not been given tax assistance.

Mr. Meale: I am pleased that my hon. Friend has mentioned this problem, because in the past few months people have come to my surgery and told me that they can no longer keep up their mortgage repayments but the value of their properties would not be enough to cover the mortgage even if they were able to sell. Some have said that they offered their properties to anybody who would take up the mortgage repayments, thereby forgoing any investment in the properties. This has happened time and time again.

Mr. Cohen: My hon. Friend has made a good point. Many people are caught in the trap of not being able to afford mortgage repayments, and often have mortgages that are greater than the value of their properties. Such people have no way of escape, and the Government should be doing something for them.
On 10 July 1990, I introduced, as a ten-minute Bill, the Mortgage Assistance Bill. Had the Government accepted that Bill, we should not now have a collapsed housing market and 100,000 repossessions. I will not repeat all that I said then—it is to be found at columns 181 to 183 of Hansard of that day. However, I made five main proposals.
The first was to allow mortgage payers to convert to part-ownership, thereby scaling down the ownership element and allowing time to meet reduced payments. The second was to let the mortgage payer convert to shared ownership with a local authority or housing association, so that he would pay half mortgage and half rent, thereby reducing the amount that he would have to pay and the debt that he had incurred.
My third suggestion was that we should facilitate conversion from ownership to rental, and a great deal more needs to be done to allow those faced with debts that they cannot repay to move over to rental but to stay in their own homes. Such a move could be supported by local authorities.
Fourthly, I said that there should be a duty on the lending institutions, the building societies and the banks to sort out alternative arrangements before any court action for repossession. All too often they wash their hands of cases, take people to court and repossess properties before investigating all the means for helping people to stay in their homes.
The fifth measure that I proposed was special funds for local authorities and new borrowing arrangements to enable them to enter shared ownership schemes, and

special funds to housing associations. The Government still ignore that suggestion. They will not give local authorities money to tackle the problem of repossessions.
This puny, stamp-sized measure that the Government have introduced is far too little, far too late.

Mr. Allen McKay: The Bill will only tinker at the edges of a housing crisis that the Government fail or do not wish to recognise. Anything that helps to solve housing problems is welcome, and I am advised by the building societies that the Bill will go a small way to easing problems for them; they do not say that it will ease the problems of my constituents. The lowering of the mortgage interest rate is to be welcomed, but all the comments about that have been made in terms of helping the housing market, not of helping those of my constituents who are homeless.
During my time in local government and central Government I have never known such a housing crisis. About 90 per cent. of the letters in my postbag concern housing. I hold a surgery every Saturday and Sunday somewhere within the constituency, and about 90 per cent. of the complaints that are brought to me involve housing. The Bill will go nowhere to deal with the problems. I have never known circumstances in which young people with children are facing the possibility of going into hostel accommodation because no housing is available. We should be disgusted with ourselves. The Government should be especially disgusted with themselves for allowing such a crisis to develop. Young mothers of 18, 19 and 20 years of age are facing the prospect of hostel accommodation.
What is the reason for this? The answer is that the Government turned their back on local government itself, and on the way in which local government deals with its housing responsibilities. In 1979, when the Government came to power, those of my constituents who placed their name on the local authority housing list had a home within three weeks. A single person who placed his name on the list had a home within 10 weeks. There is not a chance in hell of getting a house in my constituency now because there are none. That is because the local authority has been unable to build houses for the past six years.
The Government stand condemned because they have not provided sufficient money to enable local authorities to get rid of old housing stock that should have been condemned and cleared away. This stock is having to be used because of the Government's housing policy.
The Government stand condemned for many things but especially for the housing crisis that their policies have created. As I have said, the Bill will do nothing to house people. It must be understood that 300 families a week are losing their homes. Those people turn to local authorities and they are being turned away. As a result, those without their own home move in with friends, parents or relatives. The overcrowding should never be tolerated. I thought that we had got rid of it some time ago. Indeed, we did, but because of the Government's ideology on home ownership unacceptable overcrowding has returned.
I agree with the Government about home ownership. There is no finer state within a community—for those who wish to buy. Unfortunately, many people either do not wish to buy or are unable to buy. When there is a 40 per cent. unemployment rate in a constituency, as there is in


mine, many people are unable to buy and will be unable to do so for many years. There is not a market to satisfy such a position.
The private rented sector is milking the position; it is all right. There is certainly a market there. When people are turned out of their homes they have to go into rented accommodation. My constituency is a fairly-low-rent area, but people are now having to pay £60 to £70 a week. In fact, they are not having to pay, the DSS has to pay. The people whom the Government talk about—the community charge payer and the taxpayer—have to find the money for that rent. There is a lucrative market in the private rented sector because people have nowhere else to go.
My local authority, which had 16,500 houses, has now sold about 8,000–50 per cent. of its stock. That has left a huge gap because the local authority cannot replace them. However, some of the 8,000 people who bought those houses are now themselves becoming homeless. Why cannot the local authority buy back those houses? Why cannot it be reimbursed for doing so? Those houses could then be put back into the rented sector, which would sort out a great number of problems for a great many people.
Why cannot local authorities return to the position in which they can buy rented and owner-occupied accommodation that is for sale at a competitive price? Why is not the money available for them to do that? Until that happens, all the tinkering at the edges will be to no avail. The Government may think that it will get them off the hook, but the people whom the Government's housing policy has affected will not let them off the hook. They and their families will not forget the misery that that policy has caused.

Mrs. Llin Golding: I want to talk about the state of the building industry both in my constituency and throughout the country. Steetley is a well known and large employer in the brick industry. It was encouraged by the Government to make massive investment in its plant in my constituency. It has been working at only 50 per cent. capacity ever since.
Since September 1989, about 3,000 people have lost their jobs in the brick industry. Steetley is spending its time fighting a takeover bid which it does not want, which the workers from my constituency certainly do not want, and which the workers and management throughout the company do not want. The company could better spend its time producing bricks to build homes for people, rather than fighting takeover bids.
In the slate and tile industry—again an important industry in my constituency——

Mr. Deputy Speaker (Mr. Harold Walker): Order. I regret to tell the hon. Lady that she is a long way away from the subject under debate. She must relate her remarks more closely to the Bill.

Mrs. Golding: My remarks are relevant, Mr. Deputy Speaker.

Mr. Maude: Order.

Mrs. Golding: Does the Minister want to say something?

Mr. Maude: No.

Mrs. Golding: My remarks are relevant because the relief on stamp duty is intended to encourage people to buy homes.
The building industry seems to be closing all over the country, at a time when homes are needed. Where is the necessary production to take place? The same is happening in the ceramic industry. In Scotland, Armitage Shanks is closing, with attendant job losses, and the industry is also suffering in north Staffordshire. Industries do not start up again simply because of a change in Government policy.

Mr. Meale: If the trapped £18 billion in local government receipts from the sale of council properties throughout the United Kingdom were released, the building industry could construct some 550,000 new homes, accommodating more than 1 million people. Given that—according to Shelter and the Salvation Army—that is the number of people who are registered as homeless, the housing problem would be greatly eased by such a move.

Mrs. Golding: My hon. Friend is absolutely right. What the Government's policy is doing to people is disgraceful. So many of them are coming to all our surgeries: young couples with children living in top-floor flats, for instance. How can mothers with babies and small children in pushchairs climb stairs? Old people are living in homes that are entirely unsuitable; they desperately need ground-floor accommodation, but they cannot obtain it.
You may think, Mr. Deputy Speaker, that I am wandering slightly from the subject of the Bill. The Bill is designed to release people and to make the housing market move, but the Government will not succeed with it. What is needed is a concerted policy: that is clear to us when we talk to local authorities, housing associations and, indeed, manufacturers. Doors need handles; windows need catches and glass. Then there are all the ceramic fittings for bathrooms and kitchens, and the bricks and tiles. All those things must be produced, and we cannot simply flick a switch and expect production to start up again.
The Bill goes a little way, but it is only a very little way. What we need is a Labour Government, committed to housing the homeless.

Mr. Maude: It is usual on these occasions to say what a useful debate we have had. I do not think, in all sincerity, that I can say that this time; by and large, this has been a fairly sterile occasion.
We have presented a measure that has been widely welcomed. We never claimed that it would transform the world, or switch on a light in darkness. We said that it was one part of an important package, which would have a measurable and serious impact on the housing market and would greatly benefit a large number of people. It is therefore mildly irritating when Labour Members come along, shedding copious crocodile tears about all the problems and refusing to address the issues raised by the Bill.
Labour Members seemed to veer wildly between saying that the Bill would be hopelessly ineffective and would make no difference to the housing market before 20 August, and saying that it would devastate the housing market after that date. They cannot have it both ways. As was pointed out by my hon. Friend the Member for Beaconsfield (Mr. Smith), either it will have no effect before, or after, 20 August, or the reverse.
The fact is that the Bill will bring forward transactions, as all who have studied the position recognise. It is a good and useful measure, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Boswell.]

Bill immediately considered in Committee.

Clause 1

TEMPORARY RELIEF FROM STAMP DUTY

Dr. Marek: I beg to move amendment No. 1, in page 1, line 10, leave out '£250,000,' and insert '£240,000,'.

The Chairman of Ways and Means (Mr. Harold Walker): With this it will be convenient to consider amendment No. 2, in page 1, line 12, leave out '£2,500,' and insert '£2,400,'.

Dr. Marek: I am sorry that the Financial Secretary felt that he could not say that we have had a useful debate. I can only surmise that the Tory party has been caught out and that he did not like it. No crocodile tears were shed on this side. Our speeches were sincere and honest and addressed the real problem for which the Government have not provided a solution.
Amendment No. 1 seeks to reduce the £250,000 limit to £240,000. There are few houses, if any, in my constituency that cost £250,000. I do not therefore see why the limit has to be set so high. However, it may have something to do with the south of England. If so, I shall wait with bated breath to hear what the Financial Secretary has to say about it.
I suspect that people with very big houses are not short of a bob or two. A stamp duty concession for them seems yet again to be the Tory party looking after its own. It looked after the rich when it reduced the higher rate of income tax from 60 to 40 per cent. All the tax reliefs went to the rich. I wonder whether the Government are playing the same old game. The amendment is partly a probing amendment. It seems to us that £240,000 would be more appropriate than £250,000. I am prepared to be persuaded otherwise. However, unless the Minister can put forward a very good argument, we may have to insist on pressing the amendment to a Division.

Mr. Maude: The hon. Member for Wrexham (Dr. Marek) described the amendment as a probing amendment. He sought to make a point about the level at which we have chosen to set the threshold. No huge matter of principle is involved. Where the threshold in any taxation matter is set is a question of judgment, not of fundamental principle. The reason for setting it at £250,000 is that it will exempt about 90 per cent. of the purchases of residential property from stamp duty. We shall retain about 90 per cent. of the revenue from stamp duty in the case of transactions affecting commercial and other properties.
The proposal, as formulated, is very well targeted and concentrates the benefit where it is most likely to stimulate activity in the housing market. I said earlier that about 600,000 purchasers of residential property should be exempted. It is not a great matter of principle. We believe that we have pitched the threshold at the right level.

Therefore, I invite the Committee to support the provision, as drafted, and the hon. Gentleman to withdraw the amendment.

Amendment negatived.

Dr. Marek: I beg to move amendment No. 3, in page 1, line 14, leave out '20th' and insert '30th'.

The Chairman: With this, it will be convenient to consider the following amendments: No. 4, in page 1, line 17, leave out '20th August' and insert `7th May'.
No. 6, in page 1, line 24, leave out '16th' and insert '31st'.
No. 7, in clause 2, page 1, line 28, leave out '20th' and insert '30th'.

Dr. Marek: We come to an interesting set of amendments that fall into two groups: amendments Nos. 3 and 6 and amendments Nos. 4 and 7. I originally considered tabling an amendment to replace 20 December with 10 December, but the Table Office ruled me out of order. The Government's rules on tabling amendments prohibited that.

Mr. Maude: No.

Dr. Marek: Through their majority and will, the Government impose Standing Orders on the House. The Opposition are prohibited from tabling an amendment that would increase taxation.
An important issue is at stake, so we tabled amendment No. 3. I wanted to make a point about the unfairness that might arise if someone's property deal were stamped on, for example, 15 December. They would say, "A few days later, we could have saved ourselves £1,000 or £2,000." The Government gave no warning of their intentions. On 19 or 20 December, they produced, like a rabbit out of a hat, a concession on stamp duty.
I realise that the amendment simply delays the problem. If the Government accepted our amendment, no doubt people who had their instruments stamped on 7 or 8 December would feel just as aggrieved as those who had their instruments stamped on 17 or 18 December.
An article that appeared in The Independent on 11 January says:
On 29 November last year, Elaine and Graham Bradbury-Stewart completed the purchase of their home in Lightwater, Surrey. They paid £125,000. If they had moved just 20 days later they would have saved £1,250 in stamp duty—a sizeable chunk of their moving expenses of £5,500. Not surprisingly they feel somewhat aggrieved. Mr. Bradbury-Stewart says, 'We were "gobsmacked" as they say—£1,250 would have bought some new furniture, or the bathroom suite that we need. I can see no real justification for having the tax in the first place. It is the Government taking 1 per cent. for nothing.' Neither Graham nor Elaine believes that increasing the threshold temporarily will boost the housing market.
On Second Reading, I produced a fair amount of
evidence to show the veracity of that statement. People regard it as an election ploy. That is the purpose of the Bill—an election ploy.

Mr. lain Mills: Is the hon. Gentleman satisfied with the fact that he has only one Labour Member supporting him, apart from Members of the Front Bench?

Dr. Marek: I do not think that the hon. Gentleman has been here for long. He probably walked in recently, as I do not remember seeing him.

Mr. Mills: rose

Dr. Marek: If the hon. Gentleman will let me answer him, I shall be happy to give way to him again. He must examine who has spoken in the debate. One Tory Back Bencher has spoken, but four or five Opposition Back Benchers have spoken. That makes my point. It shows bad grace for the hon. Gentleman to complain that I am calling the Bill a gimmick when the main tenor and thrust of my Second Reading speech was to that effect. If the hon. Gentleman wants to intervene again, I shall give way.

Mr. Mills: So the hon. Gentleman regards it as very good that four or five hon. Members have spoken in support of his speech?

Mrs. Golding: Six to one.

Dr. Marek: The hon. Gentleman should not push us too far or he might find himself here much longer one early morning—

Mr. Greg Knight: He was joking.

Dr. Marek: He was joking, was he? I shall accept the Whip's advice on that, but let us return to the argument.
One argument involves the inherent unfairness in the Government's suddenly producing without any warning a substantial concession in duty. The people who had their instruments stamped a few days before the Government produced such a bonus feel aggrieved and wonder why they could not have partaken of it to a certain extent. It is no use the Financial Secretary saying that they were going to buy property anyway and that the measure is designed to kick-start the housing market, if I may use that phraseology.
The Minister made his announcement on 19 or 20 December and some instruments would probably be stamped on 21, 22, 28, 29 and 30 December and were then going through the pipeline. What is good for one set of people should be good for another set and I look forward to hearing what the Financial Secretary has to say about that.
The other group of amendments deals with when the concession should end. I could not resist tabling an amendment to help the Conservative party. The Conservative party is calculating on ending the concession on 19 August, but I think that it should be ended on 7 May. If it were to be ended on 7 May—on election day—there would be such a hive of activity before then that it could perhaps be believed that Conservative party policy was working and that the market was very active. It would also give the Opposition a chance to demonstrate the norm—that immediately after the concession ended, the market would cease to exist for a considerable time. We have had these problems before when joint mortgage relief came to an end and I fail to see why the Government have introduced a measure of a similar nature under which there will be problems on 20 August.
The second group of amendments seeks to elucidate from the Minister how he feels the situation will develop and what will happen to the market on that date and beyond. I shall be interested to hear what he has to say.

Mr. Maude: As the hon. Member for Wrexham (Dr. Marek) eventually managed to sort out, there are two broad groups of amendments: one makes a silly point and the other a bad one.
The bad point is about the time from which the welcome relief from stamp duty comes into force. He said that it should have been introduced earlier because it was terribly unfair that people who had already had their documents stamped would be denied the relief.
Whenever any change is made to any taxation, some people fall on the helpful side and some people fall on the unhelpful side. That is simply a fact of life. If one makes the date 10 December, 10 November or 10 January, there will still be a line, and some people will fall on one side and some people will fall on the other. It seems to make sense that one should say that the provisions will come into force from the date on which my right hon. Friend the Prime Minister announced that the change would take place. People who were executing documents after then knew that they would have the benefit of the relief from stamp duty or the refunds under clause 2. Those whose transactions were already complete knew that the transaction would be completed on the basis which they had expected. There is nothing especially dramatic or unfair about that.
The silly point made by the hon. Member for Wrexham concerned the date at which the provision would end. He thinks that it is frightfully witty to make the point about amending the Bill so that the suspension ends on what he fancies is a date on which the general election may take place. The hon. Gentleman has sought to argue this evening that the provision is nothing more than an electoral gimmick, which he contends with what I discern as a growing element of unease, gradually working towards panic. In the way in which he moved the silly amendment, he conceded that the measure will have the effect that we intend, and that it will draw forward transactions and thus have a stimulating effect on the housing market. Although his points are not very good, he has inadvertently drawn attention to the underlying belief of Labour Front-Bench Members that the measure will work. I am grateful to the hon. Gentleman for that.

Dr. Marek: The Financial Secretary has put his finger on the point. The measure will bring forward transactions, but it will do so at the cost of having a dearth of transactions later. That is the problem, and that is why the Bill is a gimmick. It is not a long-lasting solution. Transactions will be made earlier than they otherwise would have been, but there are likely to be few more—perhaps no more—transactions as a result of the Bill. That is why the Opposition tabled the amendments.

Amendment negatived.

Dr. Marek: I beg to move amendment No. 5, in page 1, line 18, leave out subsection (3).

Mr. Mills: Formally.

Dr. Marek: I do not move it formally. The amendment is a probing amendment. I will not speak long on it as I want to hear what the Financial Secretary has to say about it and how he will defend the clause.

Mr. Maude: It is a little difficult to know what the hon. Gentleman seeks to probe through the deeply thought out and stimulating probing amendment. He suggests that we should remove clause 1(3) which concerns documents executed on or after 20 December which were not already stamped before the resolution was passed. The general rule is that documents cannot be given in evidence or used for other legal purposes, except in criminal proceedings,


unless they have been duly stamped in accordance with the law in force when they were executed. If a document was executed on, say, 20 December, the law in force at that time would have required it to be stamped on the basis of the £30,000 threshold because the House had not yet passed the resolution to give effect to the new threshold. Now that we have passed the resolution, the benefit of the new threshold can be given.
Clause 1(3) ensures that documents will not be subject to a legal challenge merely because the new threshold did not yet have statutory effect at the time at which they were executed. That is, therefore, a necessary protection for the taxpayer and the amendment would remove that protection. I therefore invite the hon. Gentleman, having probed in a compelling way, to withdraw the amendment.

Dr. Marek: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause I ordered to stand part of the Bill.

Clause 2

PAYMENTS IN RESPECT OF STAMPED INSTRUMENTS

Dr. Marek: I beg to move amendment No. 8, in page 2, line 7, leave out 'one year' and insert 'six months'.

The Chairman: With this it will be convenient to take amendment No. 11, in page 2, line 13, at end insert 'and within three months of the claim being made'.

Dr. Marek: The two amendments are fairly sensibl—at least, amendment No. 11 is—[Laughter.] Conservative Members laugh, but the fact that I said that amendment No. 11 was sensible said nothing about amendment No. 8, which seeks to change the period during which a claim can be made from one year to six months. That seems sensible as one does not want legislation that could result in claims being left on the statute book for too long. I should have thought that legal advisers would draw the attention of prospective purchasers to the Bill and a claim would be made in a matter of days. I am prepared to be persuaded by the Financial Secretary that the period should be one year, but I think that six months would be better. That was why I did not give an unequivocal view on the amendment.
However, I am clear about amendment No. 11. It is possible that the commissioners will delay repaying amounts due and the amendment seeks to limit that delay to three months which I believe is sensible. I hope that the Financial Secretary will agree to the amendment.

Mr. Maude: On the hon. Gentleman's first point about reducing the period for claiming a refund, there is no magic in one figure as opposed to another and not very much hangs on this one way or the other. We made a broad judgment on what is a sensible period to allow for claims to be made and decided on 12 months. The hon. Gentleman is right in saying that in practice most claims will be made quickly—within a matter of days, not months—but there may be cases where, for one reason or another—because someone is ill or temporarily working overseas or even, perhaps, because of an oversight—the claim is not made quickly. As it does not much matter whether some claims are made later rather than earlier, we wanted to allow reasonable time to cover such cases.
It could be argued that the limit is on the generous side, but I do not see any particular advantage in reducing it. I hope that the hon. Gentleman will accept that, while no great weight attaches to this matter either way, the time limit in the Bill is reasonable and defensible, so the amendment should be withdrawn.
Amendment No. 11 proposes that the Inland Revenue should be required to make reimbursement within three months of a claim being made. It involves an important matter of principle: in practice, the Revenue will make the reimbursement as quickly as possible once it has been established that a payment is properly due. I expect that that reimbursement will be made well within the three months after the claim is made.
The problem with the amendment is that payment by the Revenue will depend on the necessary conditions being satisfied. It is not clear what the hon. Gentleman is suggesting should happen in cases where the Revenue cannot be satisfied that those conditions have been met until more than three months after the claim has been made, for example, where information in support of the claim is slow in coming forward. I am sure that the hon. Gentleman would not wish the Revenue to be required to make a payment without being satisfied that it is properly due.
The fact that I resist the amendment does not mean that I would expect payments to take more than three months. However, the amendment would place the Revenue in a position that the Government could not defend. In those circumstances, I hope that the hon. Gentleman will withdraw the amendment.

Dr. Marek: I understand what the Financial Secretary to the Treasury means about amendment No. 8. That is a matter of judgment. I also understand what he says about amendment No. 11. However, it is an important part of a citizens charter that a citizen should have some right in that moneys that are due should be paid. While there may be some defects, the sense of the amendment is clear. If the claim has been made and the commissioners are satisfied, they should pay that money as quickly as possible. Three months is a generous period.
The Opposition feel strongly about that. The public and our citizens should have some right and the matter should not be left to the mercy of commissioners, the Government or anyone else. I would like to divide the House on amendment No. 11, but to withdraw amendment No. 8.
I beg to ask leave to withdraw the amendment

Amendment, by leave, withdrawn.

Dr. Marek: I beg to move amendment No. 9, in clause 2, page 2, line 9, leave out paragraph (d).

The Chairman: With this it will be convenient to consider the following amendments: No. 10, in page 2, line 10, at end insert
'and (e) any conditions in paragraph (d) above shall be regulated by statutory instrument subject to annulment in pursuance of a Resolution of either House of Parliament.'.
No. 12, in page 2, line 14, leave out 'may' and insert 'shall'.

Dr. Marek: The amendments seek to define a little more tightly the conditions that may be applied by the


commissioners. They also give control to the House, in that any such conditions shall be subject to a negative resolution procedure in the House.
Amendment No. 12 replaces "may" with "shall" and amendment No. 9 seeks to delete paragraph (d). In other words, it would change the Bill so that commissioners may not impose other conditions.
I understand that none of the amendments is necessarily perfect. However, the Bill states:
such other conditions (if any) as the Commissioners may determine".
That gives a lot of power to the commissioners, but no redress for the citizen or applicant who wants his or her money to be returned. The commissioners may decide on reasonable conditions and I am not against that. That would be right. However, they may sometimes decide on unreasonable conditions. If that is the case, the Bill should be tightened up and and I hope that the Financial Secretary to the Treasury will agree about that.

Mr. Cryer: I want to draw the attention of the Financial Secretary to the Treasury to some of the remarks made by my hon. Friend the Member for Wrexham (Dr. Marek). The Bill will pass to the Commissioners of Inland Revenue an ability to legislate.
It is true that that applies to a very narrow area in respect of instruments that were executed on or after 20 December 1991 and before 16 January 1992 and stamped before 16 January. However, there is also the application of restrospective legislation about which the House is very cautious. The Minister will claim that it is usual in taxation to apply retrospective powers. That may be true when concessions are made, but, as the Financial Secretary knows, when retrospective powers are applied for a tax that is being levied, we run into great trouble. In effect, people are asked to make payments for back taxation, which is deemed to be very unfair, and that is why the House generally looks rather cautiously at retrospective legislation.
As the commissioners' powers are not qualified, because the Bill allows
such other conditions (if any) as the Commissioners may determine are satisfied
amendment No. 10 allows for negative procedure instruments to be provided by the Government. That is a reasonable precaution. It is a narrow matter. It would not be the first time that the House has required delegated powers to be exercised by a Minister over a narrow range of subjects. The House should be extremely cautious in delegating powers to unelected people outside the House. It does that on a number of occasions, but the House is extremely sloppy and careless in its supervision of delegated legislation, anyhow. Sooner or later, an almighty error will cause pressure from outside the House to produce changes in the scrutiny of delegated legislation.
It is about time that the House looked at this matter in more detail. When changes have been made in the system of delegated legislation, it has always been because serious errors had been made. The room for error is greater when powers are granted to bodies outside the House. Although it has many faults, the House has the ability to provide some scrutiny for even the most esoteric and labyrinthine legislation. The Financial Secretary will correct me if I am wrong, but clause 2(1)(d), which contains the power of the commissioners to provide conditions, could provide for

people to be ineligible for the stamp duty concessions which the Bill provides. If people who applied before 16 December 1992 were in breach of the conditions which the commissioners are given power to apply, they would lose the right to exemption of stamp duty.
The Financial Secretary may say that the commissioners may never apply any of those powers, because the Bill states, "If they wish to apply any of the conditions." However, those powers are given to the commissioners. Unless there is further primary legislation to take them back, they are being handed over unconditionally to the commissioners. Therefore, we should take a fair amount of care in doing that.
I shall be interested to hear the Financial Secretary's comments on how he expects that the commissioners will apply clause 2(1)(d), why it is inserted, why the commissioners have been given such discretion, and whether that discretion is necessary. The Financial Secretary must have some examples in mind. If those matters are genuinely trivial, the Committee might be satisfied, bearing in mind that the powers are unqualified. They simply have the right to create conditions, and that is less than satisfactory. Surely the Financial Secretary must have something in mind or that provision would not be in the Bill. I look forward to the Financial Secretary's comments, and I hope that he can satisfy me on the validity of that provision.

Mr. Beith: The hon. Member for Bradford, South (Mr. Cryer) has made an important point clearly and lucidly, and if this were not a temporary provisions Bill, we would be entitled to press it a great deal further. I was not happy to see in the Bill the words that he quoted, but in this case they relate to and will be in force for only a very short period and do not look likely to restrict the concession a great deal. Nevertheless, the hon. Gentleman has given a timely warning.
A curious situation appears to have developed. I was trying to develop an index of official Opposition concern. The hon. Member for Wrexham (Dr. Marek) said that the Opposition were very concerned about amendment No. 11 and would therefore divide the House on it—I am inclined to support him on that point. However, if I was looking for a measure of official Opposition concern, I should think that the fact that the hon. Member for Bradford. South has spoken in the debate is possibly a measure of relatively greater Opposition concern than would have been the case if only the hon. Member for Wrexham had spoken. A debate in which not only the hon. Member for Bradford, South speaks but in which the hon. Member for Renfrew, West and Inverclyde (Mr. Graham) delivers an impassioned speech must be an index of even greater Opposition concern. That combination of speakers arose against the whole principle of the Bill, but did not lead to a Division or to a vote against the principle of the Bill. A strange inverse principle of Opposition concern appears to be at work.
The hon. Member for Bradford, South raised a perfectly sound point and I hope that the Financial Secretary, and especially the parliamentary draftsmen, will take it seriously into account.

Mr. Maude: I have some sympathy with the points raised by the hon. Members for Bradford, South (Mr. Cryer) and for Berwick-upon-Tweed (Mr. Beith). As the Committee and especially all those who are accustomed to


dealing with financial legislation know, there are tiers of legislation. Some things are rightly regarded as being of such importance and permanence that only primary legislation is satisfactory. For less important matters, secondary legislation that is subject either to positive or negative resolution is regarded as an adequate protection, and for things that are even lower down the scale of importance, arrangements such as this are regarded as satisfactory. The hon. Member for Bradford, South is entirely right to test and probe the provisions and to require Ministers to set out why they think that this approach is right here.
I am happy to tell the House that I shall set out only briefly a little about the way in which the reimbursement arrangements will work. People will be able to claim a reimbursement from the Revenue in the circumstances that we have set out if they would have paid less duty or none on the basis of the new £250,000 threshold. When they paid the duty, they will have been given a special receipt for it. With their claim for reimbursement, they will need to produce that receipt and the stamped document. But in some cases it may not be possible for the claimant to produce the stamped document because the appropriate registrar cannot release it. In those circumstances, the Stamp Office will advise what alternative evidence should be produced. In order to ensure that reimbursement is claimed only once on any particular document, the document may be stamped to show that the reimbursement has been claimed.
As all hon. Members who have spoken have acknowledged, in practice we expect the number of reimbursements to be small—low hundreds rather than thousands—because most people will have decided to wait for the new threshold to be given legal effect before presenting their documents to be stamped.
The clause permits the Inland Revenue to lay down conditions for reimbursement. It has been suggested it was unduly wide to allow the Revenue to determine what the conditions should be. But the reason for that is to allow flexibility to cater for particular circumstances. For example, an absolute requirement that the applicant should produce the original stamped document would cause problems in some cases, because the registrar might not be able to release the document to him. In those cases, the Revenue will need to ask for details of the document and may need to arrange directly with the registrar for the document to be stamped to show that the reimbursement has been made. In some cases other evidence may be required—for example, because the claim has been made by a different person from the one who is named on the receipt for the duty. There may well be good reasons for that. For example, the taxpayer may have died or may have changed his solicitor. It is sensible that the Revenue should be able to satisfy itself that the claim is well founded and ensure that double claims are not made for the same duty.
Several unusual circumstances may crop up in no more than one or two cases. It is unnecessary to create all the paraphernalia of secondary legislation so that particular conditions can apply to no more than a handful of cases. I have considered the matter carefully. I am confident that this is a proper occasion for the use of this type of power. It is important to ensure that double claims are not made for the same duty and that claims are well founded. Amendment No, 9 would prevent the Revenue from taking those precautions.
This is a sensible, pragmatic and flexible arrangement. I can undertake that the Revenue will operate it in a reasonable and sensible way. In those circumstances, I hope that the Committee is satisfied with my explanation and that the hon. Gentleman will withdraw the amendment.

Mr. Cryer: Madam Deputy Chairman—Chairwoman—Chairperson. [Laughter.] I am covering all eventualities, Miss Boothroyd. After all that difficulty with descriptions, I should like to concentrate on what the Minister has said about the power granted in clause 2(1)(d). The power is drafted too widely. Yet it covers a narrow area. It is to require alternative evidence where applicants have to provide proof of payment when they pay the stamp duty and then seek a reimbursement. That is a perfectly legitimate process within the framework of the legislation.
I suspect that the reason why the power is rather widely drafted is that people who draft legislation have got into the habit of writing in a belt-and-braces clause so that they have the necessary powers to do anything at all about a difficult situation that crops up. I do not believe that that is right. Where such powers are given, they should be carefully defined. The Minister says that he wants some flexibility to deal with a handful of cases. All right, that can be incorporated into the precise area with which the Minister proposes that the Bill should deal. That would be preferable to the bland assertion that any conditions whatever can be produced.

Mr. Dennis Skinner: Does my hon. Friend think that the Minister is throwing money at the problem?

Mr. Cryer: I would not agree that he is throwing money at it, but he could be giving power to the commissioners to produce conditions that make reimbursement difficult. Clearly, that will not be the case if everyone has good will, but occasionally good will is absent. In those circumstances, the commissioners may produce conditions which deny someone a perfectly proper reimbursement. That would be unjust. Any remedy would be difficult to obtain.
This is primary legislation on a fairly narrow matter. That narrowness should be indicated in the Bill, if necessary by an additional few words or a schedule defining what the commissioners can do. That would be entirely preferable. The clause is yet another example of the drafting of broad clauses because the Government want to hand over administrative details. Successive Governments have done it. That is why my hon. Friend the Member for Wrexham (Dr. Marek) has tabled a perfectly sensible amendment on a narrow point to require that the instruments come before the House. If the conditions were unfair, we would have the opportunity to pray against the instrument and have a debate on it—should we happen to get any time, which is another question entirely. We could then remedy any faults.
In spite of the Minister's explanation, I still find the clause unsatisfactory. Undoubtedly, my hon. Friend the Member for Wrexham will also have some comments to make on it.

Dr. Marek: Among Opposition Members there is concern about clause 2. I agree with the remarks of both my hon. Friend the Member for Bradford, South (Mr. Cryer) and the hon. Member for Berwick-upon-Tweed


(Mr. Beith) about the amendments. However, these are temporary provisions, and I am mindful of the Financial Secretary's assurance that the commissioners will behave reasonably. I hope that they will.

Amendment negatived.

Amendment proposed: No. 11, in page 2, line 13, at end insert

'and within three months of the claim being made'.—[Dr. Marek.]

Question put, That the amendment be made:—

The Committee divided: Ayes 21, Noes 115.

Division No. 44]
[12.50 


AYES


Barnes, Harry (Derbyshire NE)
McKay, Allen (Barnsley West)


Beith, A. J.
McMaster, Gordon


Brown, Nicholas (Newcastle E)
Mahon, Mrs Alice


Cryer, Bob
Marek, Dr John


Dalyell, Tarn
Meale, Alan


Dixon, Don
Skinner, Dennis


Foster, Derek
Wareing, Robert N.


Golding, Mrs Llin
Wray, Jimmy


Graham, Thomas



Grant, Bernie (Tottenham)
Tellers for the Ayes:


Hood, Jimmy
Mr. Frank Haynes and


Jones, leuan (Ynys M6n)
Mr. Jimmy Dunnachie.


Lewis, Terry





NOES


Alexander, Richard
Douglas-Hamilton, Lord James


Allason, Rupert
Dover, Den


Amess, David
Durant. Sir Anthony


Arbuthnot, James
Fallon, Michael


Arnold, Jacques (Gravesham)
Fenner, Dame Peggy


Ashby, David
Forsyth, Michael (Stirling)


Baker, Nicholas (Dorset N)
Freeman, Roger


Baldry, Tony
French, Douglas


Bennett, Nicholas (Pembroke)
Goodhart, Sir Philip


Boscawen, Hon Robert
Goodlad, Rt Hon Alastair


Boswell, Tim
Goodson-Wickes, Dr Charles


Bottomley, Peter
Greenway, John (Ryedale)


Bowden, A. (Brighton K'pto'n)
Hague, William


Bowden, Gerald (Dulwich)
Hamilton, Neil (Tatton)


Bowis, John
Hargreaves, A. (B'ham H'll Gr')


Bright, Graham
Harris, David


Brown, Michael (Brigg &amp; Cl't's)
Hawkins, Christopher


Burns, Simon
Hayward, Robert


Butler, Chris
Hogg, Hon Douglas (Gr'th'm)


Carlisle, John, (Luton N)
Howarth, G. (Cannock &amp; B'wd)


Carrington, Matthew
Hughes, Robert G. (Harrow W)


Chapman, Sydney
Hunter, Andrew


Chope, Christopher
Irvine, Michael


Clark, Rt Hon Alan (Plymouth)
Jack, Michael


Clark, Rt Hon Sir William
Janman, Tim


Colvin, Michael
Jessel, Toby


Conway, Derek
Johnson Smith, Sir Geoffrey


Coombs, Anthony (Wyre F'rest)
Jones, Gwilym (Cardiff N)


Coombs, Simon (Swindon)
Jones, Robert B (Herts W)


Cope, Rt Hon Sir John
King, Roger (B'ham N'thfield)


Couchman, James
Kirkhope, Timothy


Currie, Mrs Edwina
Knight, Greg (Derby North)


Davies, Q. (Stamf'd &amp; Spald'g)
Lester, Jim (Broxtowe)


Davis, David (Boothferry)
Maude, Hon Francis


Day, Stephen
Maxwell-Hyslop, Sir Robin


Dorrell, Stephen
Meyer, Sir Anthony



Mills, lain
Speller, Tony


Mitchell, Andrew (Gedling)
Spicer, Sir Jim (Dorset W)


Moate, Roger
Stanbrook, Ivor


Monro, Sir Hector
Steen, Anthony


Morrison, Sir Charles
Stevens, Lewis


Moss, Malcolm
Stewart, Andy (Sherwood)


Moynihan, Hon Colin
Summerson, Hugo


Neubert, Sir Michael
Taylor, Ian (Esher)


Nicholls, Patrick
Thompson, Sir 0. (Calder Valley)


Nicholson, David (Taunton)



Nicholson, Emma (Devon West)
Thompson, Patrick (Norwich N)


Norris, Steve
Twinn, Dr Ian


Onslow, Rt Hon Cranley
Viggers, Peter


Paice, James
Waller, Gary


Pattie, Rt Hon Sir Geoffrey
Wheeler, Sir John


Portillo, Michael
Widdecombe, Ann


Raison, Rt Hon Sir Timothy
Wilkinson, John


Riddick, Graham
Wood, Timothy


Rowe, Andrew
Yeo, Tim


Shaw, David (Dover)
Younger, Rt Hon George


Shelton, Sir William



Shepherd, Colin (Hereford)
Tellers for the Noes:


Skeet, Sir Trevor
Mr. David Lightbown and


Smith, Tim (Beaconsfield)
Mr. John M. Taylor.

Question accordingly negatived.

Dr. Marek: I beg to move amendment No. 13, in page 2, line 17, leave out subsection (4).
I have tabled the amendment because I am genuinely perplexed. Perhaps the Financial Secretary will explain these matters in simple and lucid terms so that we can all understand them.

Mr. Maude: I cannot guarantee that I can meet the concluding part of the request of the hon. Member for Wrexham (Dr. Marek), but I shall endeavour to fulfil the first part.
The amendment would remove subsection (4), which provides for a reimbursement made under the clause to be treated as a repayment for technical purposes under the Exchequer and Audit Departments Act 1866. Strictly this is because the reimbursements made under the clause will not be repayments of stamp duty but equivalent payments. This will not affect the amount that taxpayers receive, only the form of the payments. It is to avoid any possible risk that the legal status of a document that has already been stamped may be prejudiced if stamp duty already paid had to be refunded.
Section 10 of the Exchequer and Audit Departments Act permits the Inland Revenue to deduct tax repayments from the gross revenue that it collects before paying it into the Consolidated Fund. Subsection (4) of the clause is necessary because the reimbursements will technically not be repayments of duty but tantamount to tax repayments. It is sensible, therefore, to deal with them in the same way as tax repayments. There is no question of the Inland Revenue making a payment in a case where no tax has been paid. I hope that that satisfies the hon. Gentleman.

Amendment negatived.

Clauses 2 and 3 ordered to stand part of the Bill.

Bill reported, without amendment.

Bill read the Third time, and passed.

Lockerbie Bombing

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kirkhope.]

Mr. Tam Dalyell: I have obtained a copy of part of an investigation report submitted by the Lockerbie police to the Lord Advocate, Lord Fraser of Carmyllie. The report is significant because it appears to contradict statements made to the House on 14 November by the Foreign Secretary about the Lockerbie bombing. In reply to the hon. Member for Southend, East (Mr. Taylor)—whose role, in my opinion, in relation to Libya has been serious and honourable throughout—the Foreign Secretary said:
I deliberately put in that sentence that there was no evidence about the involvement of other Governments."—[Official Report, 14 November 1991; Vol. 198, c. 1230.]
However, the report, publicly quoted I believe for the first time by me tonight, unambiguously details evidence from the Scottish police which implicates a Syrian-based terrorist organisation. The report is entitled:
Bombing of Pan Am 103: Interview of Marwan Abdel Razzaq Mufti Khreesat as a suspect.
I should say to the House that I asked Sir William
Sutherland, QPM, chief constable of Lothian and Borders, with whose force I have worked in harmony and respect for 30 years as a Member of Parliament, to approach chief constable Esson, and deputy chief constable Orr about the possibility of my talking to them. Understandably, these two police officers and their colleagues in the Scottish police, for whom I have sincere admiration, declined to do so. I would not like colleagues to think that I have been discourteous to the police or critical of them in the face of what is the greatest crime committed against civilians of the western world this decade.
I shall quote from the conclusions of the report, a copy of which I have given to the Foreign Office, together with tonight's speech. It states:
Evidence could have been led to the fact that after being in Germany for 13 days he [Marwan Khreesat] had not approached Dynacord, which was supposed to be the reason for his visit.
That company was not approached by police until 22
February 1989. I am exceedingly unhappy about the actions of the German police and the CIA and I am
sending copies of this debate to the American and German ambassadors.
The long report ends:
It is possible that the brown suitcase was delivered to another person while Dalkamoni was 'parking his car' and that that suitcase contained another IED (Improvised Explosive Device), and that the suitcase referred to is the brown Samsonite suitcase which contained the IED on PA 103.
The IED which was recovered in the Ford Taunus appears to be similar to the IED which destroyed PA103.
A similar device, hidden in a record player, was used on the El Al plane in August 1972, and one Marwan Omar Krisat is still wanted in this connection.
There can be little doubt that Marwan Abdel Razzaq Mufti Khreesat is the bomb-maker for the PfLP-GC, that he was brought to West Germany for that express purpose and there is a possibility that he prepared the IED which destroyed PA 103. As such he should not be at liberty but should be closely questioned regarding his activities with a view to tracing his associates in the attack.
Has the Foreign Secretary been shown that document
by the Scottish police? Although it was written in 1989, I understand it has never been contradicted or withdrawn.

In my discussion of 50 minutes with the courteous Lord Advocate, I gained the impression that for the first 18 months of the inquiry there was substantial information, still relevant, pointing to the involvement of an Iranian and Syrian-based organisation.
Why has the Foreign Secretary been so categorical in ruling out the involvement of other parties when Lord Fraser, the Lord Advocate, has gone out of his way not to rule out the involvement of other states? How does the hon. Member for Grantham (Mr. Hogg) account for the discrepancy between the privately held view of the investigators and the public statement of his Government? Will the Foreign Secretary confirm that, contrary to his statement in November, the Government have not ruled out Syrian and Iranian involvement?
I shall quote pages 212 and 213 of David Leppard's excellent book "On the Trail of Terror". It states:
The commissioning and the inspiration for the bombing came from the Iranians. They commissioned an operation against an American civilian airliner in revenge for the shootdown of the Iranian airbus in the Gulf in July of 1988. The original commission was given to Jibril. Jibril's commission was frustrated because the [West German] unit that was to go against aircraft including American civilian aircraft was arrested.
The CIA has evidence which indicates that Ali Akbar Hashemi Rafsanjani, the president of Iran, knew of the decision and supported it. Just what this evidence is, however, remains a closely guarded intelligence secret. 'It was not a rogue decision', Cannistraro stated. Rafsanjani, he pointed out, was commander-in-chief of the Iranian military in the summer of 1988 when the operation was reportedly commissioned through the Iranian Revolutionary Guard.
How can the Foreign Secretary state that there is no evidence that any Government but Libya was involved when the inquiry is, I understand, actively pursuing all possible evidence? Is he not prejudicing the inquiry by ruling out the possibility of finding new evidence which could lead to the indictment of officials or terrorists from Iran and Syria?
It seems to me that Libya is being used as a sole whipping boy when there was an alliance of elements from Iran, Syria and Libya. Father Patrick Keegans, of 1 Sherwood crescent, Lockerbie—than whom no one had more direct involvement in the tragedy—authorises me to repeat the concerns expressed in his letter to me of 13 January, of which the Foreign Office has a copy. He expresses concern in particular about the telephone conversation between Mrs. Thatcher and President Bush in March 1989, agreeing to "play down" the Lockerbie disaster, and the removal of Syria and Iran from any Lockerbie connection after that telephone call.
I cannot do better than quote the last paragraph of the powerful leader in The Sunday Times of 24 November 1991:
Maybe it has been necessary to be nice to Iran and Syria to secure the release of the remaining hostages in Beirut. It must be more than coincidence that both countries were officially cleared of any Lockerbie involvement just a few days before Terry Waite and Thomas Sutherland were at last released. Our joy at their freedom should be tempered by the shame of the cost: the relatives of the victims of the Lockerbie bomb must now come to terms with the fact that most of those behind the murder of their loved ones are going to get away with it. The cause of justice is being sacrificed on the altar of diplomatic convenience. We will live to regret it.
I find it extraordinary that the prime suspect, as identified by the Scottish police, has not—after three years and some £20 million of taxpayers' money spent on the inquiry—been interviewed. I also find it extraordinary that


we appear not to have actively sought information about the suspected involvement of officials, or foreign officials, of the Iranian and Syrian Governments in the conspiracy to blow up a western civilian airliner in the latter half of 1988.
Against that background, I plead with the Government not to embark on sanctions against Libya—let alone another military strike wreaking havoc in Tripoli and Benghazi of the kind that, along with my hon. Friend the Member for Tottenham (Mr. Grant), I saw with my own eyes in November. I hope that my hon. Friend will be given time in which to speak tonight.
I was deeply concerned to read a front-page report in this week's Tribune by Ian Williams, the paper's United Nations correspondent. He wrote:
Speculation is growing in the United Nations that John Major and George Bush are looking to fight their 1992 election campaigns on the back of military action against Libya.
That, apparently, is the view of the United Nations in some quarters.
Be it the adopted daughter of President Gaddafi or the daughter of Jim and Jane Swire, it is the innocent who suffer. Dr. Swire is concerned—and who is in a better position to be?—about the cycle of violence that could be unleashed. What we need is a round-table conference with middle eastern countries about the prevention of terrorism. Military action will lead to the tit-for-tat of another Lockerbie. Our time and energies—never mind our money—should be spent on fighting famine and disease throughout the world.

Mr. Bernie Grant: I thank my hon. Friend the Member for Linlithgow (Mr. Dalyell) for allowing me some time in which to speak.
As a person of African descent, I am particularly concerned about the plight of African countries and their peoples. That is why I am so keen to see justice done in the case of Libya. I am also opposed to terrorism, and keen to see the perpetrators of this horrendous crime brought to justice—but not tried by a kangaroo court.
After the Gulf war, President Bush talked about a new world order and about big nations not taking advantage of small ones. He talked about the need for legality, international law and respect for a nation's sovereignty. It is on precisely those points that I wish to dwell. My hon. Friend the Member for Linlithgow spoke about the evidence in the case, but I wish to deal with other matters.
Let me make three points. The first concerns the legal position. The Minister must state the legal basis on which he is acting when he asks the Libyans to hand over two of their nationals. Under which international convention or agreement is he acting?
Under the 1971 Montreal convention, the convention for the suppression of unlawful acts against the safety of civil aviation, unless there is an extradition treaty in force between countries—in this case, between Libya and Britain—Libya is entitled, indeed obliged, to try the offenders under her own domestic law. Article 7 applies, as there is no extradition treaty between Britain and Libya. The article states:
The Contracting State in the territory of which the alleged offender is found shall, if it does not extradite him, be obliged, without exception whatsoever and whether or not the offence

was committed in its territory, to submit the case to its competent authorities for the purpose of prosecution. Those authorities shall take their decision in the same manner as in the case of any ordinary offence of a serious nature under the law of that State.
Furthermore, article 14 of the Montreal convention states:
Any dispute between two or more Contracting States concerning the interpretation or application of this Convention which cannot he settled through negotiation, shall, at the request of one of them. be submitted to arbitration. If within six months from the date of the request for arbitration the Parties arc unable to agree on the organization of the arbitration, any one of those Parties may refer the dispute to the International Court of Justice by request in conformity with the Statute of the Court.
Libya was a signatory to the Montreal convention on 19 February 1974. Britain is also a signatory to the convention.
The Minister will no doubt say that Libya is a terrorist state and therefore put itself outside the Montreal convention. I shall make two points. First, no United Nations body has declared that Libya is a terrorist state. That is something which the United States of America and the United Kingdom Governments alone have said. Secondly, I understand that there are proper and well defined procedures under the Vienna convention by which states that may have transgressed may be dealt with. These have not been utilised in the case of Libya. It is not therefore correct for the Minister to describe Libya as a terrorist state, as he has done, unless of course the British Government have now taken it upon themselves so to designate states unilaterally and arbitrarily, as does the United States.
Since Libya received the warrant from the Lord Advocate, it has acted in accordance with its own domestic law and with international law by appointing a High Court judge who is carrying out an investigation into the charges levelled against the two Libyan citizens. The Minister should state why the Government are not prepared to allow police officers, or other relevant officials, to co-operate with the Libyans in their attempts to deal with the matter, as international law both permits and demands that they do, especially as the articles in the Libyan criminal procedure code, which prohibits the handing over of the men without proper evidence, were set up by the British in 1953. The legal system in Libya has not been altered since that time, I understand. Just as Britain would not hand over its citizens to another country for trial without proper prima facie evidence, neither should Libya be expected to do so.
My second point concerns the position of Malta. The charges laid by the Lord Advocate make much of the Maltese link in the trail that led to the Lockerbie tragedy. Like so much else in the version of events that we have been given, there are grounds for believing that this, too, is open to question. I recently visited Malta and spoke to senior members of the Maltese Government about the Maltese connection in all this. I was told in no uncertain terms that the Maltese Government, who had their own investigating team working alongside the Scottish police and the Federal Bureau of Investigation, co-operating with them at every stage and seeing the same evidence, came to a completely different conclusion from them.
In the opinion of the Maltese authorities, the evidence to support a Maltese connection is, at best, very feeble. They had found no evidence to support the United States-United Kingdom assertions that the bomb originated in Malta. The Maltese Government's views


could not be reconciled with the views of the United States and the United Kingdom Governments, despite visits to Malta by the Minister of State, the deputy Attorney-General of the United States and the Lord Advocate.
The Maltese Government believe that the Libyan authorities are acting properly under international law and their own domestic law by investigating the charges laid against the two Libyans and by refusing to extradite them. They are totally opposed to military action or sanctions against Libya. In fact, the Maltese Government felt that, although they did not want it, they would be prepared to consider a request that the Libyans be tried in Malta as a way out of the present impasse, especially as the British and United States Governments claim that the crime originated in Malta. Perhaps the Minister could tell us why the British Government are not prepared to consider that.
My third point concerns the consequences that sanctions or military action would have in the region and the Arab world generally. Since the Gulf war there has been considerable political turmoil in north Africa, especially in Algeria, where the rise in support for fundamentalism has been dramatic. Western economic or military action against Libya will cause further instability in the Maghreb region, which could result in refugees and asylum seekers pouring into Europe as their first port of call to escape political turmoil in their countries. Some people believe that such action by the United States and Britain could play into the hands of fundamentalists in the region.
It should be noted that, to date, the Arab League has unanimously supported the Libyan Government's actions and called for the formation of a joint United Nations and Arab League committee to investigate the matter and for it to be resolved peacefully. That scenario is different from the one that prevailed before and during the Gull war, when the position of the United States was supported by several Arab countries.
The 1986 bombing of Libya, to which my hon. Friend the Member for Linlithgow has referred, was an unforgivable episode in international relations that later turned out to have been unjustified. Innocent civilians died. That mistake must not be repeated.
The proper way forward is a full and proper international inquiry into the Lockerbie disaster to establish the truth of what happened. The Libyans have suggested that an inquiry should be held and they would be willing to hand over the two named individuals to any international court set up to try them. In view of the recent miscarriages of justice in British courts and biased reporting in the media, it is questionable whether the two individuals could get a fair trial in Britain. But in Britain we can begin the search for truth and justice by setting up the public inquiry that has been demanded by the United Kingdom Families of Flight 103 campaign. Their courage and steadfastness deserve nothing less.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): Hon. Members will recall that on 14 November last year my right hon. Friend the Foreign Secretary made a statement in the House in which he reported that a warrant had been obtained by my right hon. and learned Friend the Lord Advocate in connection with the bombing of Pan Am flight 103. The warrant,

backed by a full statement of the facts, was delivered to the Libyan Government by the Italian Government, and a text of it has been placed in the Library.
The House will recall that, on 27 November last year, the Government, with the Governments of France and the United States, made certain requests of the Libyan Government. On the same day, the British and American Governments, in a separate statement, requested the Government of Libya to surrender for trial all those charged with the crime and to accept complete responsibility for the actions of Libyan officials. We further requested the Libyan Government to disclose all that they knew of the offence, including the names of all those responsible, and to allow full access to all witnesses, documents and other material evidence, including the remaining timers. The Libyan Government were also asked to agree to pay appropriate compensation.
Since that time, the Government and the Governments of France and the United States have been assiduous in their respective efforts to persuade the Government of Libya to deliver the two named individuals for trial in Scotland or the United States. I do not suppose that the people of Scotland will have been pleased to have heard the hon. Member for Tottenham (Mr. Grant) describe their judicial procedures as a "kangaroo court".

Sir Hector Monro: Does my hon. and learned Friend agree that, in a way, the speeches of the hon. Members for Linlithgow (Mr. Dalyell) and for Tottenham (Mr. Grant) were a criticism of Dumfries and Galloway police, who have produced conclusive evidence about the culprits in Libya and have been supported entirely by the Lord Advocate, who believes that he can make a firm case against them? To try to shift the guilt to another country is surely a criticism of a police force that has done outstanding work.

Mr. Hogg: I have high regard for the work of the constabulary. It has produced a prima facie case sufficient to justify the issue of a warrant. It is now for the relevant courts, either of Scotland or of the United States, to determine whether the people named in the warrant are guilty or innocent—it being for the prosecution to prove the case beyond reasonable doubt. I share my hon. Friend's respect for the constabulary.
The House will further note that the United Nations Security Council is presently discussing a resolution supporting the decision of the Governments of France, United States and Britain. That resolution condemns the destruction of Pan Am flight 103 and the UTA flight and the resulting loss of lives. It also strongly deplores the fact that the Libyan Government have not yet responded effectively to the requests made of them to co-operate fully in establishing responsibility for those terrorist acts. It urges the Libyan Government immediately to provide a full and positive response to those requests. It urges all states—individually and collectively—to encourage the Libyan Government to respond fully and positively to what has been asked of them.
I turn now to the speeches made by the hon. Members for Linlithgow and Tottenham. Both went into the events in considerable detail. I have no intention of doing so. As they know, two individuals have been named in a warrant. It is our intention that those two individuals should be


brought to trial. In such circumstances, it would be wrong for me to comment on the evidence, not least because to do so may prejudice or be thought to prejudice a fair trial.
However, it is no secret that during the first 18 months of the criminal investigation attention was focused largely on the organisation known as the Popular Front for the Liberation of Palestine—General Command, based in Damascus. When as a result of forensic scientific evidence the facts of the investigation shifted, the investigators did not abandon the material which they had gathered together over the previous 18 months, but careful examination of that material has failed to disclose any evidence which would justify the issue of warrants against nationals of any country other than Libya.
As both hon. Gentlemen may know, I have practised for 20 years at the common law Bar. I know well from personal experience that the police investigate many leads and go down many paths which ultimately take them nowhere. Those responsible for framing criminal proceedings must look at the totality of the evidence assembled at the conclusion of the investigation. It was on the basis of that evidence—the totality of the evidence—reviewed at the conclusion of the proceedings that my right hon. and learned Friend the Lord Advocate decided that there was a case for the two named Libyans to answer and he therefore issued the warrants against them. He also decided that there was no sufficient evidence to issue warrants against any other named individuals and, in particular, against individuals serving in Governments other than that of Libya.

Mr. Dalyell: Will the Minister explain his use of the word "sufficient"?

Mr. Hogg: There is no evidence to justify the issue of warrants against anyone other than the two named individuals.
Clearly we cannot exclude the possibility that other persons or Governments were involved because one cannot prove a negative. What I can say to the House is that there is no sufficient evidence to justify making such an allegation in court.
I should like to correct the hon. Gentleman on one point. My right hon. Friend the Foreign Secretary has not said that Her Majesty's Government have ruled out the involvement of other countries. What he said is what I have just said and what the Lord Advocate had previously said—that the investigation had revealed no evidence of involvement by other countries. As has been said on a number of occasions, if there is such evidence involving officials from other countries we will look at it, and if anybody has such evidence they should pass it on to the investigating authorities.
As to the future, I hope that the Libyan Government will agree to deliver the two named individuals to the courts either of Scotland or of the United States. If the Libyan Government do not agree to do this, we will have to decide what further steps may be necessary. At the moment it would not be appropriate for me to speculate on the nature of those further steps.
The hon. Member for Linlithgow has called for a round-table conference with middle eastern countries to discuss the prevention of terrorism. Indeed, to be fair to him, that is the only thing for which he called. I have to say

that that is a wholly inappropriate, not to say inadequate, response to one of the gravest crimes committed in post-war Europe. Two named people are charged with the gravest offences. They should stand trail. They will get a fair trial. It will be for the prosecution to prove the case against them. If there is any reasonable doubt as to their guilt, they will be acquitted. That is the way forward, and I hope that this House will endorse it.

Mr. Dalyell: Will the Minister answer the question put by Dr. Jim Swire about how one avoids a cycle of violence being unleashed? If military action is not ruled out—and I get the impression from what the Minister said that it is not ruled out—what does the Minister expect but tit for tat? Should we not recognise that the whole tragedy started with the bombing of Tripoli, with the bombing of the civilian areas of Benghazi, and with the shooting down by the Vincennes, now discovered to have been in Iranian territorial waters, of the Iranian airline?

Mr. Hogg: I have never made any reference to the use of force. I have said here and elsewhere that we seek to persuade the Government of Libya to comply with our request that the two people should be brought to trial before the courts either of Scotland or of the United States. We hope that we shall secure a United Nations resolution underpinning that request. We hope that the Government of Libya will comply. Clearly, if they do not, we shall have to consider our next step. I have not suggested force. I have ruled nothing in and I rule nothing out.

Mr. Bernie Grant: As an ex-lawyer, will the Minister turn his attention to my points about the Montreal convention? Why are the British Government not prepared to follow the procedures laid down in that convention?

Mr. Hogg: Those who framed the Montreal convention never contemplated that the Government of a country in which the individuals—two in this case—would be present would themselves be party to the crime. It is clear nonsense to suggest that——

Mr. Grant: It has not been proved.

Mr. Hogg: I have not suggested that it has been proved. I have said that there is a prima facie case against two individuals who are officials of a Government. That is to say not that they are guilty, but merely that there is a prima facie case in respect of which they should stand trial. It is complete nonsense to say that the Government who employ them should also be the authority that tries them. We all know perfectly well that there is a close identity of interest between the judiciary and the intelligence services in Libya. We all know that the country is a tyranny.

Mr. Dalyell: The Minister has been very good about giving way. If the country is a tyranny, why is it that 5,500 expatriates, British people working there, earning the Minister's bread and butter, my bread and butter and the bread and butter of the rest of us, take a very different view of what they think is an incorrupt and very efficient regime? The fact is that 5,500 of our fellow countrymen, many of them Scottish engineers, are working in Libya. It is simply not good enough to shrug our shoulders and say, "These people knew perfectly well what dangers they were going to." Perhaps they did know, but that is no reason to wash our hands of them. What does the Foreign Office think will happen to them if there is any further military


action? Who would sanction it first? If there were sanctions, it would mean that those people could not come back as they do now. The general pattern is eight weeks in Libya working and two weeks over here seeing the headquarters of their homes and their families.
It is high time that the Foreign Office, if it does not want to talk to the Libyans, at least talked to people such as Dick Morris of Brown and Root and employees of the 36 other British firms that are working in Libya. The Foreign

Office should ask them whether they think that what the Minister has described is a sensible way to go about matters. For my part, I am extremely alarmed by the tone of the Minister's reply—

The motion having been made after Ten o'clock on Monday evening, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-seven minutes to Two o'clock.